BIBM Certification Program on

Certified Expert in Trade Services (CETS)

Intake-XIII (Batch-1)

Assignment

Assignment Name: GFET_Chapter 1 to 8

Submitted to

Bangladesh Institute of Bank Management (BIBM)

Submitted by: Group- C

SL No Name Bank
1 MD. QUMRUR ROSHID South Bangla Agriculture & Commerce Bank Ltd
2 MD. SAIFUL ALAM Standard Bank Limited
3 MD. NURUL ABSAR The Premier Bank PLC
4 ABU YOUSUF ARMAN BRAC Bank PLC
5 FARAH DIBA Eastern Bank PLC
6 MD. NAZMUL HASAN Islami Bank Bangladesh PLC

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 Chapter 1
1. Who are Authorized Dealers? Why must the ADs must maintain adequate and proper records
of all foreign exchange transactions and furnish such particulars in the prescribed returns for
submission to Bangladesh Bank?
Authorized Dealers (ADs) in foreign exchange are AD Bank Branch, Money Changers and Limited Money
changers.
AD Bank Branch: EXP,IMP, REMI, FC LENDING, BORROWING
Money Changers: FC notes and coins (BUY or sell)
Limited Money changers: FC receive in exchange of goods: Duty Free Shop,

Requirements of ADs to maintain adequate and proper records of all foreign exchange transactions
 The ADs must continue to preserve the records for a reasonable period unless otherwise instructed by
Bangladesh Bank.
 These records must be easily available for inspection, if necessary, by Bangladesh Bank's officials.
 A minimum of 05 (five) years is the established norm for record keeping and for the inspection by
Bangladesh Bank.
 In cases under investigation by Bangladesh Bank inspection team, a clearance from the inspection team
is necessary before disposing of relevant forms and documents.

2. How are money changers defined in GFET?

 The term "Money Changer" reflects a business entity, whether it is a sole proprietorship, partnership
firm, or company; licensed by the Bangladesh Bank and a member of relevant association
representing the sector to manage certain foreign exchange transactions.
AS PER FE CIRCULAR LETTER NO,05, DATE: JUNE 01,2023 ISSUED BY FEPD
To streamline the operations of money changing business, it is necessary for licensed MCs to be a member
of relevant association representing the sector.

Chapter 2
3. Which department of Bangladesh Bank issues AD licenses to scheduled banks?
All applications for authorised dealer license should be made to Foreign Exchange Policy Department
(FEPD), Bangladesh Bank, Head Office, Dhaka

4. Who can get AD license?

The scheduled Bank that are capable to meet up the pre-requisite for obtaining AD license can get AD
license from Bangladesh Bank. the bank should also provide information showing that it has adequate
manpower trained in foreign exchange and there is prospect to attract reasonable volume of foreign
exchange business in the desired location and the applicant bank meticulously complies with the
instructions of the Bangladesh Bank

5. What is the pre-requisite for obtaining AD license?

The pre-requisite for obtaining given AD license are given below:
 All applications for authorized dealer license should be made to the Director, Foreign Exchange
Policy Department (FEPD), Bangladesh Bank, Head Office, Dhaka

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 6. What kind of persons or persons get licenses with limited scope in dealing with foreign
exchange?
Ans: Licenses with limited scope are issued to the persons or firms (e.g. hotels, bank booths, gift shops
etc.) to exchange foreign currency notes, coins, and TCs in places where money changing facilities who, in
the opinion of the Bangladesh Bank, will be able to conduct their dealings strictly in accordance with the
foreign exchange regulations. The authorisations are granted to persons or firms of adequate means and
status who, in the opinion of the Bangladesh Bank, will be able to conduct their dealings strictly in
accordance with the foreign exchange regulations. Applications for the grant of licences with limited scope
should be made to Director, Foreign Exchange Policy Department (FEPD), Bangladesh Bank, Head
Office, Dhaka.

7. What are the provisions for money changers in the following cases?
Bangladesh Bank may also issue "Money Changer" licenses to persons/firms desirous of Undertaking, as
their sole line of business, the purchase and sale of foreign currency notes, coins,
TCs from and to incoming and outgoing tourists.(Resident/Non-resident/Foreign national).
 Use of office space:
Money Changer shall have no branch office. The premise to be used for money changing business shall
not be used for any other business activity.
 Buying of foreign currency notes, coins and TCs:
Money Changers are allowed to buy foreign currency notes, coins and TCs from incoming foreign and
Bangladesh nationals coming/returning from abroad. For each such purchase an encashment certificate
shall be furnished to the seller.
 Releasing foreign currency notes, coins and TCs:
Money Changers may sell foreign currency notes, coins and TCs only to outgoing Bangladesh nationals
against their annual private travel entitlements (per calendar year USD12, 000) as per following
measures:

 Maximum limit of USD 1,000(One thousand) or equivalent in the form of cash and/or TC.
 Release of foreign exchange in excess of USD 200 (Two hundred) or equivalent shall require
valid visa.
 To outgoing foreign nationals having duly issued encashment certificates, subject to a maximum
limit of USD 500 (Five hundred) or equivalent by re-conversion of Bangladesh Taka proceeds of
foreign exchange sold by a tourist during his/her stay in Bangladesh.
 Money Changers may sell foreign currency of USD 1,000/1200 (One thousand) or equivalent to
be carried by each Hajj pilgrim against the scale at which foreign exchange may be sold to intending
pilgrims for performing Hajj as declared through the Hajj Policy of Ministry of Religious Affairs,
Government of the Peoples' Republic of Bangladesh.
 Money Changers may release foreign exchange on account of overseas allowances of the cockpit
and cabin crews allowed by Biman Bangladesh Airlines Ltd.
 The Money Changers shall verify to satisfy themselves that the journey is to be undertaken not later
than two weeks after the date on which the exchange is issued.

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  Stock of foreign currency and foreign currency account:
AS PER FE CIRCULAR LETTER NO,42, DATE: NOVEMBER 10,2022 ISSUED BY FEPD
The initial stock of foreign currency notes and coins shall be built up by the Money Changers by way of
permissible purchases from incoming foreign/Bangladesh nationals in the manner prescribed at Para (a) of
this Section above and sales in the manner prescribed at Para (b) of this Section above. The maximum stock
of cash foreign currency must not exceed USD 25,000 (Twenty-five thousand) or equivalent at the close of
each business day. Cash foreign currency beyond this limit shall either be encashed with any AD or
deposited to the foreign currency account maintained with the designated AD bank of the concerned Money
Changer. Cash foreign currency can be withdrawn from this FC account. The balance of that account must
not exceed USD 50,000 (Fifty thousand) or equivalent at any point of time. Moreover, the maximum stock
of Bangladeshi taka must not exceed BDT 50, 00,000 (Fifty lac) at any point of time. Bangladeshi taka
beyond this limit shall be deposited to money changer’s current deposit account.
 Renewal of license:
 The license shall be valid for a period of one year.
 The minimum required annual volume of foreign exchange transactions by Money Changers is
USD 5.00 (five) lac in the city corporation areas of Dhaka and Chittagong and USD 3.50 (Three
and a half) lac for other areas.
 For renewal, the licensee shall apply to the Director, FEOD, Bangladesh Bank, Head Office,
Dhaka (for Dhaka region) or to the Director of concerned Office of Bangladesh Bank (for other
areas) not later than two months before the expiry of license.
 Application for renewal shall be accompanied by copies of deed of house rent (in case of rented
house) for the proposed renewal period, up-to-date tax payment certificate, return of asset-liability
submitted to Income Tax Office, audited balance sheet of the last year (where the applicant is a
company). For non-submission of certificate evidencing payment of tax for the preceding year, an
undertaking for submitting the same later on along with latest tax payment certificate should be
furnished. The returns so submitted to tax authority must accompany documents evidencing
minimum net asset of the licensee of Tk. 10 (Ten) lac for sole proprietorship and partnership firms.
 For joint stock Company, at the time of renewal, minimum paid up capital shall be Tk.10 (Ten)
lac or more as per audited balance sheet.
AS PER FE CIRCULAR LETTER NO,05, DATE: JUNE 01,2023 ISSUED BY FEPD
Subject to satisfactory performance in the previous year, licensee shall be advised by Bangladesh Bank in
writing to deposit non-refundable renewal fee in favor of Bangladesh Bank through account payee bank
draft/pay order.
Certificate of renewal of license shall be provided through AD bank if license fee is deposited accordingly.
Money Changers must preserve the license and renewals issued by Bangladesh Bank with reasonable care.
 Change of Office:
Any change in money office location shall require prior approval of Bangladesh Bank. Applications for
changing office location should be forwarded to the Director, FEPD, Bangladesh Bank along with deed of
rent (in case of rented house), reasons for change etc.

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 CHAPTER 3
8. In which currency Bangladesh Bank's purchase and sales from and to the ADs are executed?
FE CIRCULAR NO.35 ,DATE: NOVEMBER 29 , 2022 ,ISSUED BY FEPD
Bangladesh Bank's purchase and sales from and to the ADs are in approved foreign currencies as per
notification issued by Bangladesh bank from time to time. All such transactions with Bangladesh Bank are
required to be in multiples of USD 10,000, subject to a minimum of USD 50,000 or equivalent other
foreign currencies. ADs are free to quote their own rates, ready and forward, for transactions in the
interbank market and with their customers. Other relevant instruction shall remain unchanged

9. What is Asian Clearing Union (ACU) mechanism?

The Asian Clearing Union (ACU) is a payment arrangement between the central banks of Bangladesh,
Bhutan, India, Iran, Maldives, Myanmar, Nepal, and Pakistan, and Sri Lanka. Under ACU, member central
banks settle payments, mainly related to export or import transactions between member countries, on a net
basis. ACU is a payment system where participants settle payments related to intra-regional monetary
transactions on a net multilateral basis among the participating central banks.

10. What are types of payments settled by the ACU Agreement and what are not covered in ACU
settlement mechanism?
a) The type of payments settled by the ACU Agreement:
The Asian Monetary Units shall be denominated as 'ACU Dollar' and 'ACU Euro' which shall be equivalent
in value to one US Dollar and one Euro respectively.
FE CIRUCLAR LETTER NO. 01 DATE: JANUARY 18,2018, ISSUED BY FEPD
The ACU Agreement referred to above provides for settlement of the following types of payments:
ACU Dollar
ACU EURO
ACU Japanese Yen
i. Payments from residents in the territory of one participating country to residents in the territory of
another participating country;
ii. Payments for current international transactions as defined by the Articles of Agreement of the
International Monetary Fund;
iii. Payments permitted by the country in which the payer resides.
Besides, payments arising on account of import/export transactions on deferred payment terms will also be
considered as eligible payments for being settled under ACU mechanism.
(b)The type of payments that are not covered in ACU settlement mechanism:
 The payments not related to import and export of goods and services, except to the extent mutually
agreed between two or more participants will be considered as ineligible payments for being settled
under ACU mechanism.
 The payment that covered by loan/credit agreements among the ACU member countries are also not
covered in ACU settlement mechanism.

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 11. What is the minimum threshold amount to be routed through ACU member central banks under
ACU?
The minimum threshold amount to be routed through ACU member central banks under ACU arrangement
has been set at 500 (Five hundred) ACU Dollar or ACU Euro or JPY 50,000

12. In which currencies can AD banks maintain clearing accounts with the Bangladesh Bank?
Under this arrangement, AD banks maintain clearing accounts with the Bangladesh Bank in US Dollar,
Pound Sterling, Euro, Japanese Yen, Chinese Yuan Renminbi (CNY and Canadian Dollar. Apart from the
purpose of settlement with other ADs, these accounts may also be used for transfers to and from
correspondents abroad.

13. What are the objectives of FC clearing accounts with Bangladesh Bank?
 Enabling the AD banks to settle their mutual claims in US Dollar, Pound Sterling, Euro, Japanese Yen,
Chinese Yuan Renminbi (CNY) and Canadian Dollar arising from interbank transactions; to
economies the time and cost involved in settlements through correspondents abroad.
 Settlement of the balances lying in each of the clearing accounts takes place at the end of each month.
Bangladesh Bank charges interest on the debit balance in an account on daily product basis and debits
the bank's account at the end of each working day and pays interest on the amount of credit balance at
the rates prescribed from time to time.
 Payment against inland foreign currency LCs and inland back to back LCs in foreign currency as
mentioned in Para 35 & 40 respectively, Chapter 7 shall be settled through Bangladesh Bank FC
clearing accounts of the concerned AD banks
 Operation of the clearing system is centralized in the Forex Reserve and Treasury Management
Department of Bangladesh Bank, Head Office, Dhaka; but the ADs in other centers may transfer funds
to other banks through their Head/Principal Office in Dhaka.

Prime Bank PLC: Back to Back LC for USD100, 000

TO Pubali Bank PLC: Pls credit to HSBC NY, nostro account 1234
Prime Bank: SWIT:MT202 to SCB NY, to debit USD100,00 to credit to HSBC NY, nostro account 1234
SCB: 100
HSBC: 100
SWIFT Fee
T+0: T+1
1 week

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 Chapter 4
14. Foreign currency held by ADs at the disposal of the Bangladesh Bank
The foreign currencies held by ADs shall at all time be deemed to be held at the disposal of Bangladesh
Bank.

15. Open position

Bangladesh Bank sets prudential limits on each AD bank's open (overbought/oversold) exchange
position. The AD should ensure that the prescribed open position limit is not exceeded. If an AD
exceeds the prescribed limit and fails to furnish satisfactory explanation for the same, it may be
asked to sell the excess amount ready and to cover its position by buying forward for deliveries
corresponding to the maturities of its own forward obligations.

16. Purchase of one currency against another

The ADs may enter into transactions for sale or purchase of foreign currencies both ready and
forward with other ADs, foreign correspondents and overseas branches.

17. Explain the provisions of short term loans and overdraft from correspondent banks abroad.
The ADs may obtain short term loans and overdrafts for a period not exceeding seven days at a time from
overseas branches and correspondents at the going market rates to meet their short term needs. If these
loans or overdrafts require collateral in Bangladesh or abroad prior approval must be obtained from
Bangladesh Bank. Short term loans and overdrafts taken under the authority of this para may be remitted
by the ADs without prior approval of Bangladesh Bank, but subject to report.
18. For which transactions can ADs engage in forward sales?
ADs may engage in forward sales only against bonafide need of the customers/counterparty banks. In all
cases the ADs must ensure that the cover is intended to neutralize the risks arising from such transactions.
ADs may purchase forward from banks and non-bank customers like exporters, foreign currency account
holders (including retention quota accounts of exporters, foreign currency accounts of EPZ/EZ companies),
exchange houses abroad etc. Be it forward sale or purchase, ADs must cover their own risk within the
shortest possible time.

Forward Sale: Bank is willing to sell certain amount of FC in future but rate is fixed today.
Forward Purchase: Bank is willing to buy certain amount of FC in future but rate is fixed today.
Customer and Banker; Document

19. Write down the provisions of forward sale and purchase and swap transactions.
The provisions of forward sale and purchase transactions:
FE CIRUCLAR LETTER NO. 30 DATE: OCTOBER 28,2018, ISSUED BY FEPD
 forward contracts under the purview of the regulatory instructions may be renewed/rolled
over/extended for the new delivery period at the prevailing market rate, provided Authorized Dealers
(ADs) are satisfied with documentary evidences that customers are unable to perform the contracts due
to changes in the actual requirements or other valid exigencies. In such cases, when both the
cancellation and re-booking of forward contracts are undertaken simultaneously, gain to customers, if
any thereon, to be passed on to customers at the time of entering into new arrangement. Such gains
favoring customers shall be retained in margin accounts of customers till the close of the underlying
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 transactions. Balances held in this account may be utilized by ADs for realizing dues from the customers
for this purpose.
 forward contracts may be executed on outright full settlement or net settlement on non-deliverable basis
in conformity with the principle of satisfying bonafide needs of the resident business entities.
 Hence, it is permissible to book short term non-deliverable forward contracts with roll-over flexibility
till maturity for ultimate settlement on deliverable basis against underlying transactions having long
tenor. In the context of settlement of gain/loss in favor of customers during the split tenor of the
contracts, procedure as noted at paragraph 2 above shall be applicable.

FE Circular No. 16 Date: September 24, 2023 Forward sale and purchase in foreign exchange
Please refer to paragraph 8, chapter 4 of Guidelines for Foreign Exchange Transactions-2018, Vol-1 and
its subsequent circular(s) in terms of which Authorized Dealers (ADs) are allowed to execute forward
sales and purchases in foreign exchange against bonafide need of customers and relevant counterparties.
To maintain orderly discipline in foreign exchange market, it has been decided that ADs may apply
forward premium not exceeding SMART + 5 percent per annum with declared spot rates for forward
dealings with customers and/or relevant counterparties.
Forward Premium: FR>SR: FR 120>118
Forward Discount:118<120
FE Circular Letter No. 12 Date: September 26 , 2023
Forward sale and purchase in foreign exchange Please refer to FE Circular No. 16 of September 24, 2023
in terms of which ADs may apply forward premium not exceeding SMART+5 percent per annum with
declared spot rates for forward dealing. 02. This is to clarify that the above forward premium shall only
be applied in forward sale for import payments not exceeding for 3 (three) months.

20. Whose approval is required for hedging price risk of commodities?

Bangladesh Bank’s approval is required for hedging price risk of commodities.

21. Is it true that ADs must completely hedge the commodity price risk arising from the commodity
hedge transactions by booking back to back transactions with banks having international
standing or their branches operating in Bangladesh?
Yes it is true that, ADs must completely hedge the commodity price risk arising from the commodity hedge
transactions by booking back to back transactions with banks having international standing or their branches
operating in Bangladesh.

22. Which accounts are treated as non-resident accounts?

The Taka accounts of all foreign bank branches or correspondents outside Bangladesh are regarded as non-
resident accounts. The accounts of different branches of the same bank situated in different countries must
be identified separately and the accounts of each branch or group of branches in one country should be
designated as accounts of that country.

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 23. What are the regulations for the new non-resident accounts of banks?
The regulations for the new non-resident accounts of banks are:
 ADs may open or continue to maintain Non-Resident Taka Accounts in the names of their overseas
branches and correspondents against inward remittance in convertible currencies only.
NCC: USD in USA: Nostro Account: For NCCB
SCB, NY/SBI, Mumbai: BDT (Non-Resident Taka Accounts) with NCCB in Bangladesh: Nostro
Account for SCB, NY/SBI, Mumbai
Vostro Account for NCCB in Bangladesh
SCB, NY/SBI, Mumbai: USD1000 to NCCB in Bangladesh: Convert into BDT (Local expenses, salary
for employees)
 Transfer between non-resident Taka accounts are permitted freely.
 Approved foreign currency may also be sold to non-resident bank branches and correspondents
provided the remittance is charged against credit balances held in the non-resident Taka account.
 Non-resident Taka accounts may be opened with initial deposits sent from abroad in a freely convertible
currency.
Chapter 5
24. How is outward remittances from Bangladesh defined in GFET?
All remittances from Bangladesh to a foreign country or local currency credited to non-resident Taka
accounts of foreign banks or convertible Taka account constitute outward remittances of foreign exchange.

All remittances from Bangladesh to a foreign country

Local currency credited to non-resident Taka accounts
NCC: USD in USA: Nostro Account: For NCCB: Credit USD5000
SCB, NY/SBI, Mumbai: BDT (Non-Resident Taka Accounts) with NCCB in Bangladesh: Credit BDT
5 lac
Convertible Taka account
USD100,000 into BDT 1 crore;
End of the project: BDT 20 Lacs in Tk account
He has right to convert Tk 20 lacs into USD

25. What is the approval procedure of BB for outward remittances From Bangladesh?
Answer: Applications for Bangladesh Bank's prior approval for outward remittances, wherever required,
should be submitted to the Bangladesh Bank only through the ADs and not by the customers directly; all
such applications should be forwarded by the ADs to Bangladesh Bank by AD’s own messengers or by
post. While applying to Bangladesh Bank for releasing foreign exchange on behalf of customers, AD should
submit necessary papers/documents duly attested by the authorized official of the AD along with
recommendations/comments.
26. What is the period of validity of Bangladesh Bank's approval?
Answer: All authorizations for selling foreign exchange for outward remittances given by the Bangladesh
Bank remain valid for a period not exceeding 45 (forty-five) days from the date of approval unless they
are expressly stated as valid for a specified longer period or unless they have been revalidated for a further
period. The ADs should not affect any remittance against approval of Bangladesh Bank which have lapsed.

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 27. If you want to cancel outward remittances, what is the regulation?
Answer: In the event of any remittance which has already been reported to the Bangladesh Bank on the
prescribed return being subsequently cancelled either in full or in part, the ADs must report the cancellation
of the outward remittance as an inward remittance in Form C. The same shall be reported to the 'Online
Inward Remittance Monitoring System' as well.

28. How is inward remittance from Bangladesh defined in GFET?

Answer: The term "Inward Remittances" includes not only remittance by T.T (Telegraphic transfer), M.T.
(Mail transfer), Drafts etc., but also purchases of bills, purchases of drafts under Travelers’ Letters of Credit
and purchases of Travelers’ Cheques.

29. What is Unauthorized dealings in foreign exchange?

No person, firm or company other than an AD or Authorised Money Changer (Money Changer
or Limited Money Changer authorised by Bangladesh Bank to deal in certain foreign exchange
transactions) is permitted to deal in foreign currency in any form.
30. Q State the conditions under which ADs/Authorized Money Changers may purchase foreign
currency?
The conditions under which ADs/Authorized Money Changers may purchase foreign currency are
furnished below:
 ADs and money changers may freely buy foreign currency from incoming (Local or Foreign national)
passengers regardless of nationality and regardless of whether or not a declaration on form FMJ is
produced at the time of encashment. If this form is produced, the amount encashed should be endorsed
on it.
 ADs/Money Changers shall issue encashment certificate against purchase of foreign exchange from
incoming passengers.
 The ADs may also purchase foreign currency notes, coins and other travel instruments freely from
Authorized Money Changers without the production of Form FMJ (Foreign money and jewelry)

31. What are the provisions for the disposal (sale) of foreign currency notes and coins by the ADs?
The provisions for the disposal of foreign currency notes and coins by the ADs are given below:
 The ADs are permitted to dispose of foreign currency notes etc. by way of sales to other ADs and the
general public in accordance with the instructions of Bangladesh Bank.
 They may also export foreign currency notes and coins to agents or correspondents abroad for credit
to their foreign currency accounts with the prior approval of Bangladesh Bank and Office of the Chief
Controller of Imports & Exports (CCI&E).(Export Permit) Not ERC

32. What is the limit for the release (sale) of foreign exchange in the form of USD notes to outgoing
persons (local and foreign national)?
The following instructions shall be applicable for releasing foreign exchange in the form of foreign
currency notes against different entitlements or balances held in different foreign currency accounts
as stated in different chapters of this Guidelines:
USD in note(hard), GBP, JPY, EURO
Travel: USD12000
GBP 11000 in HARD
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A. For Local Nationals:
Foreign exchange in the form of USD notes & coins not exceeding 5000 (five thousand) may be issued
in favor of outgoing Bangladesh nationals against their respective entitlements such as private travel
quota/business travel quota/travel for treatment abroad/study abroad etc. or any other general or special
permission per person per trip; the remainder amount of entitlement or the entire entitlement may be
released in the form of notes/coins of other freely convertible foreign currencies. To mention, the
entitlements may be utilized also through international cards (credit/debit/pre-paid as applicable) as
mentioned in the different Paras of Chapter 19.
B. For Foreign Nationals:
The limit mentioned in 'A' shall also be applicable to outgoing Bangladesh/foreign nationals for issuing
USD notes/coins against balances held in their respective foreign currency accounts (Private Foreign
Currency Accounts, Resident Foreign Currency Deposit Accounts, Exporters' Retention Quota Accounts
etc.) or from the balances of Convertible Taka accounts (or against equal amount of foreign exchange under
back to back basis) per person per trip; the remainder amount or the entire amount may be released in the
form of notes/coins of other freely convertible foreign currencies from the balances of the respective foreign
currency accounts in a trip. Other relevant regulations regarding issuance of foreign exchange against each
entitlement shall have to be followed meticulously as stated in different chapters of this Guidelines.
CHAPTER 6
33. Illustrate the regulatory provision for the importation of foreign currency notes and coin.
The regulatory provision for the importation of foreign currency notes and coin in different aspects are
furnished herewith:
 any person may bring into Bangladesh from any place outside Bangladesh without any limit foreign
currency notes or bank notes other than-
 Un-issued notes and coins.
 Notes legal tender in Bangladesh in excess of Taka 10,000 (Ten thousand) in value.
Provided that the concerned person makes a written declaration to the Customs Authorities at the
time of arrival in form FMJ of the entire amount;

FE CIRUCLAR LETTER NO. 06 DATE: FEBRUARY 03,2020, ISSUED BY FEPD

 Bangladesh Bank allowed incoming passengers to bring USD 10000 (Ten thousand) or its equivalent
without declaration to the Customs Authorities through Notification.
 No declaration will necessary for the amount upto USD 10000 (Ten thousand) or its equivalent in
foreign currency and does not exceed Taka 10,000 (Ten thousand) in notes legal tender in
Bangladesh.
 Sending into Bangladesh by post/courier or otherwise of any currency note, bank note or coin by
any person from abroad without general or specific permission from Bangladesh Bank is prohibited.
 Any traveler entering into Bangladesh may bring with him at every time Bangladesh currency
notes/coins within the limit as prescribed hereunder:
 Members of the crew of a ship or an aircraft or the staff of a railway may bring Bangladeshi currency
notes up to Taka 10,000 (Ten thousand) at any one time.
 Bank booths operating in airports under license with limited scope from Bangladesh Bank may take
deposits from NRBs in foreign currency brought in by them for crediting their foreign currency
accounts or Non-resident Taka accounts (by converting foreign currency at prevailing exchange

11
 rate) maintained with concerned AD bank branches. In case the foreign currency brought in by NRBs
differs from account type (i.e., USD A/C, GBP A/C, etc.) of the account holders, bank booths shall
convert the currency into relevant foreign currency at appropriate cross currency exchange rate to
effect the deposits. An incoming person may retain foreign exchange upto USD 10000 or equivalent
brought in by himself/herself without declaration and take out the same at the time of departure from
Bangladesh without endorsement in passport and air ticket. Such amounts may also be deposited in
RFCD account by a resident Bangladeshi and in NFCD account/Private FC Account by a non-
resident Bangladeshi any time after arrival in Bangladesh. Amount in excess of USD 10000 (Ten
thousand), brought in by the resident Bangladeshis, should however be encashed or deposited in
appropriate foreign currency account within 30(thirty) days of arrival. Such amounts brought in by
non-resident Bangladeshis can be encashed or deposited in foreign currency account any time after
return to Bangladesh. For a foreign national, the entire amount brought in with declaration on Form
FMJ or upto USD 10000 (Ten thousand) brought in without declaration may be taken out freely at
the time of departure. Such amounts brought in by foreign nationals can be encashed or deposited
in foreign currency account any time after their enter into Bangladesh.
34. State the regulations of export of foreign exchange.
Export of foreign exchange refers to the process of sending foreign currency out of a country. The
regulations for exporting foreign exchange can vary from one country to another and may change over time
due to economic conditions and government policies.
 Any person may take out of Bangladesh with him foreign exchange issued to him by an AD and
endorsed on his passport.
 General permission has been granted:
o To the ADs to send out of Bangladesh cheques, drafts or bills of exchange which have been
acquired by them in their normal course of business and within the terms of their
authorization;
o To a foreign national who is resident in Bangladesh, but is not domiciled in Bangladesh to
take or send out of Bangladesh drafts or cheques drawn on their foreign currency accounts

35. How much BDT can any person may take out of Bangladesh, Bangladeshi legal tender notes
and coins at any one time?
Any person may take out of Bangladesh, Bangladeshi legal tender notes and coins not exceeding Taka
10,000 (Ten thousand) only in value at any one time.
36. How much foreign currency can any person ordinarily resident in Bangladesh and any person
not ordinarily resident in Bangladesh may take out of Bangladesh without declaration at the
time of returning from abroad?
 Any person ordinarily resident in Bangladesh may take out foreign exchange not exceeding USD
5000(Five thousand) or its equivalent which was brought in without declaration at the time of
returning from abroad.
 Any person not ordinarily resident in Bangladesh including Bangladesh nationals working abroad
may take out of Bangladesh any amount in foreign exchange not exceeding the amount declared by
him to the Customs Authorities on arrival in Bangladesh. However, such a person may take out at
the time of leaving Bangladesh foreign exchange not exceeding USD 10,000(Ten thousand) or its
equivalent brought in without declaration to the Customs Authorities on his arrival in Bangladesh.

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 37. State the provisions for taking out and bringing in jewelry by outgoing and incoming passengers.
(৯) একজন যাত্রী অনবিক ১০০ (একশত) গ্রাম ওজদনর স্বণাথলাাংকার অিবা ২০০ (দুইশত) গ্রাম ওজদনর িররৌদপ্যর অলাাংকার [এক প্রকার অলাাংকার
১২ (িার) টির অবিক ব ইদি না] সকল প্রকার শুল্ক ও কর পিরদশাব িযিতদরদক আরমািন কিরদত পািরদিন।
(১০) একজন যাত্রী িিরদশ ব ইদত বিদশ আগমনকাদল ি াষণা বপ্রাদনর মার দম অনবিক ১১৭ (একশত সদতর) গ্রাম (ব শ িতালা) ওজদনর স্বণিথার
িা স্বণিথপন্ড অিবা ২৩৪ (দুইশত ির ৌিত্রশ) গ্রাম (িিশ িতালা) ওজদনর িররৌপযিার িা িররৌপযিপন্ড সকল প্রকার শুল্ক ও কর পিরদশাব সাদপদক্ষ
আরমািন কিরদত পািরদিন: তনি ব তণরথান বম, উবতবতত পতরররানরব অতততরক্ত বম ম ব ান ব া পতরররার্ স্বিবরণার বিা স্বতব প্ডণ অথরিা মররৌপযরিার
বিা িররৌপযিপন্ড আত বন বিা বম ম ব ান ব া পতরররার্ স্বিবরণার বিা স্বণিথপন্ড অথরিা মররৌপযরিার বিা িররৌপযিপন্ড লু রকাতয়ত অিরথায় আত বন
উর া Customs Act, 1969 অনু র র ায়ী বিানযরয়াপ্ত ইনি

Chapter 7
Section 1:
1. Define dealing with known customer.
Dealing with known customer:
 The ADs must ensure that they deal only with known customers having a place of business in
Bangladesh and can be traced easily should any occasion arise for this purpose.
 Opening of LCs and payments for imports into Bangladesh should be made through an AD in the
area where the (applicant of the LC is resident).
 In case the importer is a new customer to AD, the AD should obtain certificate from the AD through
which the applicant imported earlier to the effect that no bill of entry is overdue for submission by
the importer. The same should be duly verified by the AD through 'Online Import Monitoring
System' of Bangladesh Bank.
2. Use of Correct HS Code:
 It is mandatory to use correct HS Code to indicate the classification of goods to be imported as per
First Schedule of the Customs Act, 1969.
 No bank shall open LC without quoting correct HS Code in the LC or purchase contract (as the
case may be).
 Failure to do so may lead to imposition of penalties by the Customs Authority. In all cases of doubt,
reference should be made either by the AD or the customer direct to the concerned Customs
Authority.
As per FE Circular no 10, dated 18 September, 2023:
For proper identification of imported Goods, it is mandatory to use correct HS Code including 8 digits (6+2)
in the proforma invoice sending by exporter or Indent sending by the relevant agent of the exporter’s
country.

3. Imports on FOB basis:

 The AD banks may at the request of their importer clients make payments of freight/transportation
charges in Taka or in equivalent foreign exchange to shipping companies/airlines/eligible licensed
freight forwarders, out of the total value of LC issued for the import covering costs of goods and
transportation charges.

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  EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAP, DPU & DDP
 EXW, FCA, FAS, FOB: Freight by buyer (BDT 4 lac: Salary, Utilty, overhead expense,
duty, tax: Net BDT 200,000 to remit to shipping lines abroad)
 1 month later: freight forwarders to AD to remit BDT 200,000 in USD to Shipping line
 CFR, CIF, CPT, CIP, DAP, DPU & DDP: Seller

The ADs should also issue a certificate to the importers as the shipping companies/airlines etc. are
under instructions not to accept payment of freight in Taka or FC unless the above-mentioned
certificate is produced to them.
 ADs shall not deposit the amount in their FC accounts designated for outward payment on account
of surplus earnings/foreign liabilities without producing this certificate.
4. What are the general provisions of Import under LC?
 AD should establish LCs against specific authorization only on behalf of their own customers who
maintain accounts with them and are known to be participating in the trade.
 Payments in retirement of the bills drawn under LCs must be received by the ADs by debit to the
account of the concerned customer or by means of a crossed cheque drawn on the drawee's other
bank.
 These restrictions shall not apply to import of articles for the private use of the importer as permitted
in the IPO.
5. What are the terms on which LC may be opened?
I. Documentary Credits: All LCs and similar undertakings covering imports into Bangladesh must
be documentary LCs and should provide for payment to be made against full sets of onboard
(shipped) following any of the manner.
 Bills of lading,
 Air way bills,
 Railway receipts,
 Truck receipts,
 Post/courier parcel receipts showing despatch of goods covered by the credit to a
destination in Bangladesh.
II. All LCs/ similar arrangements must specify submission of signed invoices and certificates of origin.
LC: Invoice
Documents: Not signed
LC: Signed Invoice
Documents: Not signed: Discrepant

III. LCs requiring prior permission: It is not permissible to open clean (SBLC) or revolving LC.
Applications for opening such LCs should be referred to Bangladesh Bank with full particulars.
IV. LC with realization clause: It is permissible to open LC with realization clause. As per FEPD
CIRCULAR 15 APRIL 04, 2021 ADs may continue to issue back to back LCs/usance LCs with
realization clause for input procurements on behalf of exporters.
V. Transferable LC: The ADs may open transferable LCs for imports into Bangladesh under contract
(Performa invoice, indent/sales and purchase contract) without reference to Bangladesh Bank.
Credit report: BNF: Mr. X

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 2nd BNF: Unkonwn
VI. Opening of LC for imports from countries banned by the competent authority: It is not permissible
to open import LCs in favor of beneficiaries in countries from which imports into Bangladesh are
banned by the competent authority.

6. How does AD verify the import price?

As per FE Circular no 10, dated 18 September, 2023:
For proper verification of imported goods comparing the international market price exporter as well as the
agent of the exporting country should clearly incorporate their PI as well as the indent, the following
information about the imported goods
 Full description of goods such as quality, brand, grade (if applicable),unit prize, packaging related
information etc.
 If more than one good is imported under same PI then full description such as quality, brand, grade
(if applicable),unit prize, packaging related information etc. Of each type of goods should be
incorporate
 If more than one good is imported under same PI then unit of the product should be shown as per
their nature instead of showing KG, Liter, Pc as general.
 Incoterms should be incorporate as per International Chamber of Commerce (ICC) and also
incorporate the freight cost where applicable.
 For proper identification of imported Goods, it is mandatory to use correct HS Code including 8
digits (6+2) in the proforma invoice sending by exporter or Indent sending by the relevant agent of
the exporter’s country.
 KG :100 kg @ 50= USD 5000
 PC: 100 PC @ 40 = USD 4000

7. What are the instructions are to be followed by ADs import through land ports?
 Only one port of entry (land port) is to be mentioned specifically in the LC/purchase contract (as
the case may be);
 LC covering value more than USD 5000 (USD 10,000 in case of coal import) or equivalent should
be sent through SWIFT or other similar arrangements to the advising bank;

8. What is the prescribe period of opening LC?

LC covering import of goods into Bangladesh against valid contract should be opened within the validity
period of sale-purchase contract, if any, prescribed in the current IPO 2021-2024.
PI: 20% Cash in Advance, 80% LC (within March, in the April)

9. Illustrate the provision of Credit Report for the foreign suppliers.

The ADs should also obtain confidential report on the exporters from their branches or correspondents
abroad or in their discretion, satisfy themselves as to the standing of the exporter by consulting standard
books of reference issued by international credit rating agencies acceptable to the ADs in all cases where
the amount of
 LC/contract exceeds USD 10,000 (Ten Thousand) against proforma invoices issued directly by
foreign suppliers and

15
  USD 20,000 (Twenty Thousand) against indents issued by local agents of the foreign suppliers.
Head Offices/ Principle Offices of all ADs shall maintain a central database of collected reports
and allow their ADs to use the relevant credit reports of the foreign suppliers stored in the said
database.
 Such reports should be obtained by the ADs themselves and the reports if submitted by the
importers should not be accepted. The ADs may also, at their discretion and in their own interest,
verify the standing of the beneficiaries even in cases where the value of the credit is lower than the
limits mentioned above. Credit report may remain valid for a period of maximum twelve months
from the date of issuance if no adverse report comes to the notice of the AD. Moreover, credit
report of the same supplier collected for one importer may be used for other importers within the
same validity.

10. Illustrate the regulations for the following perspective:

Remittance against discrepant documents/documents received directly by the importers:: ADs
may allow remittance against discrepant documents/documents received directly by the importers after
the goods have been cleared from the customs, on the basis of the relative
 Purchase contract
 The authenticated copy of the customs -bill of entry for consumption.
 Customs certified invoice in the case of import by post/courier and the relative invoices.
11. Advance remittance against imports:
Advance remittance for permissible imports of goods and services into Bangladesh may be affected by the
ADs without prior approval of Bangladesh Bank, against importer applications and signed undertaking
provided that:
i. The purchase contract with supplier specifically requires advance payment;
ii. The supplier furnishes repayment guarantee acceptable to the AD from a bank abroad, to be
invoked for refund of the amount paid in advance in the event of the supplier's default in
delivering the goods or services as per contract. Such guarantee need not however be insisted
upon in cases of advance payments up to USD 10,000 (ten thousand) or its equivalent for
any permissible import subject to compliance of the following instructions:
iii. Requests for advance remittance where the suppliers are unwilling or unable to furnish the
repayment bank guarantee mentioned above may be forwarded by the ADs, along with their
recommendations, for specific decision of FEPD, Bangladesh Bank on merit of each case.
iv. However, advance payment for import from ERQ account may be done as per relevant
instruction mentioned which is up to USD 25000 or its equivalent.
Advance TT: No permission for USD10,000, ERQ: USD25,000 per import/ per instance
Say USD 1 lac
First: AD asks for repayment guarantee from abroad
If not, BB permission is required
Last; If goods is not into BD, AD to recover the remitted amount

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 12. Distinguish between application procedure for remittance on Form IMP
For private import:
 All applications for payments against imports into Bangladesh (including imports by enterprises of
EPZs/EZs from abroad) should be made on form IMP with separation of FOB value, freight,
insurance and other charges.
 IMP is required for import only.
 IMP Form is not applicable for local trade including Local Back to Back LC other than import
from EPZs.
13. Illustrate the regulatory provision for submission of the authenticated copies of
a. bill of entry,
b. Certificated Invoices
The regulatory provision for submission of the authenticated copies of bill of entry are:
 In all cases of remittances for imports into Bangladesh, the importer must submit the relevant
authenticated copy of the customs bill of entry within four months from the dates of remittances.
 PAD: 4 February : 4 months from
 In case of imports on suppliers' credit term, the prescribed period of four months for submission of bill
of entry shall be calculated from the date of acceptance of import documents.
14. Illustrate the regulatory provision of the following:
a. Bill of entry against import on buyers' credit/external credit
In case of import under buyers' credit/external credit, the period of submission of documentary evidence in
support of imports i.e. bill of entry shall be four months from the date of acceptance of import documents.

UPAS LC:
NCCB PLC: OBU: 4 February: based on the acceptance of ADs (Gulshan): Acceptance 4 February
NCCB PLC: OBU payment : 4 February: based on the acceptance of ADs (Gulshan): Acceptance 1
February

b. Extension of time limit for submission of bill of entry

Applications for extension of the time limit beyond four months in cases of genuine difficulties, such as
delay in the arrival of the ship or difficulties in clearing the goods already landed at port in Bangladesh etc.
shall have to be forwarded to Bangladesh Bank (FEPD, Head Office or other offices) for consideration
mentioning clearly the concerned IMP No. & LC/contract no. (as reported to the 'Online Import Monitoring
System'). Moreover, scanned copy of approval of extension of time limit for submission of bill of entry
shall have to be forwarded to FEOD Bangladesh Bank.

15. If the imported goods are completely lost, what is the role of AD?
 In the event goods are completely lost, copy of the form IMP should be forwarded to Bangladesh
Bank giving full particulars of the loss and the manner in which the insurance claim has been
collected.
 In the event of partial loss, the authenticated copy of the customs bill of entry for the goods actually
cleared should be submitted giving full particulars of the loss and the manner in which the insurance
claim has been collected.

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 16. What are the regulations of:
a. Import on deferred payment basis:
Subject to compliance with other conditions imports is allowed on deferred payment/usance basis in the
following cases:
 upto 360 (three hundred sixty) days on deferred payment/usance:
(i) Import of capital machinery and spares for own use by industrial importers.
(ii) Industrial raw material imports for own use of industrial importers.
(applicable till December 31, 2023 as per FE Circular No.11/2023, after that 180 days usance
is applicable).
(iii) Coastal vessels including oil tankers and ocean going vessels including those procured for
scrapping.
(iv) Import of agricultural implements and chemical fertilizers.
(applicable till December 31, 2023 as per FE Circular No.11/2023, after that 180 days usance
is applicable).
(v) HR Coil, scrap, pig iron & sponge iron used for manufacturing of flat steel and long steel under
steel industries for being used in own factories.
(vi) Empty LPG cylinder by industrial units for their own use to facilitate energy sector.
(FE Circular No.10/2021)
(vii) Import of Raw materials for API and Laboratory Reagents producing industries on
Buyer’s/supplier’s credit terms. (FE Circular No.07/2019)
(viii) Import of raw materials to facilitate pre-fabricated Steel Structure industries for their own use.
(FE Circular No.23/2022)
 upto 270 (two hundred seventy) days on deferred payment/usance:
(ix) Import of unprocessed yarn for own use by industrial importers producing outputs for only
local delivery against back to back LCs to facilitate backward linkage industries. This usance
period is useable for imports within the limits of production capacity of the concerned factory
as set by the Department of Textiles or up to delivery value realized in foreign currency in last
twelve months, whichever is lower. (FE Circular No.06/2019)
 upto 180 (one hundred eighty) days on deferred payment/usance:
(x) Import of life saving drugs (certified/declared as such by Drugs Administration Authority) and
Ophthalmic Medical Equipment including Intraocular Lens. (FE Circular No.41/2020)

17. Import against buyers' credit:

FEPD Circular No. 04: Interest rate ceiling for short term permissible trade finance in foreign exchange
01/02/24: To facilitate the foreign trade finance and considering the global market trend & interest rate
scenario, it has been decided to set all-in-cost ceiling per annum with mark-up of 4.00 percent over
benchmark rate, e.g. SOFR, Euribor etc., applicable to the relevant foreign currency against short term
permissible trade finance.
Less than one year trade export and import in FC: SOFR, Euribor+4.00 percent

18
 18. What are the regulations of payment for the following areas?
a. Payment in foreign currency against local supply of goods under international tender
AS PER FE CIRCULAR LETTER NO. 09, DATE: 02-MAR-22 ISSUED BY FEPD
Authorized Dealers (ADs) can, on behalf of Government authorities, establish letter of credit (LC) in
foreign exchange favoring local contractors to execute work orders under international tender. The
paragraph also allows ADs to settle import payment obligations of local contractors out of the funds retained
in foreign exchange for 30 days. It has now been decided that paragraph will be read as follows:
 ADs may establish letter of credit (LC) in foreign currency favoring local contractor to execute
work order provided under international tender.
 Such LCs established in foreign currency shall be settled through FC clearing accounts of the bank
concerned maintained with Bangladesh Bank.
 Foreign exchange thus received may be retained up to thirty days to settle import payment
obligations of the client.
19. Payment of import bills from advance export proceeds retained in FC accounts of ship
builder-exporters
 General authorization has been given to ADs to open FC accounts on behalf of ship builder-
exporters for retaining export proceeds received in advance against ship exports.
 The balances of these accounts may be used for input procurements.
 ADs should comply with relevant instructions in operating the FC accounts.

20. What is the regulation regarding the Remittance against purchase of software through e-
delivery?
ADs may affect remittance against purchase of software through e-Delivery subject to observance of the
following instructions:
 Customs assessment of the purchases: ADs may allow their customers to arrange customs
assessment of the software after being satisfied from the certificate issued by Bangladesh
Association of Software and Information Services (BASIS) to the effect that the purchase of
software is genuine and sourced from reliable supplier.
 Outward remittances: On receipt of customs assessment order and documentary evidence of
payment of duties/taxes, ADs may affect payment against the purchase of the software subject to
compliance of the following conditions:
 ADs shall be satisfied with the certification/license issued by the supplier that the software has
already been received by the purchaser;
21. What is the instruction should be complied by the ADs for opening Back to Back Import LC?
The ADs may open back to back (BTB) import LCs against export LCs received by export oriented
industrial units operating under the bonded warehouse system, subject to observance of domestic value
addition requirement (stated in terms of permissible limit of value of imported inputs as percentage of
FOB export value of output) prescribed by the Ministry of Commerce from time to time.
 Only recognized export oriented industrial units operating under bonded warehouse system will be
allowed the back to back LC facility. The unit requesting for this facility should possess valid
registration with the CCI&E and valid bonded warehouse license.

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  The master export LC (against which opening of back to back LC is requested) should have validity
period adequate to cover the time needed for importation of inputs, manufacture of merchandise
and shipment to consignee.
 The back to back LC value shall not exceed the admissible percentage of net FOB value of the
relative master export LC (as per prescribed value addition requirement) and the price of goods to
be imported must be competitive. For computation of net FOB value of a master export LC, the
freight charge, insurance cost and commission if payable by the exporter shall be deducted from
the LC value. If the freight element is not shown separately, a certificate from the shipping company
or the shipping agent should be asked for.
 The back to back import LCs shall be opened on usance basis for a period not exceeding180 (one
hundred eighty) days. Back to back LCs opened against (a) EDF administered by Bangladesh Bank
and/or against (b) balances on NFCD Accounts may be on sight basis subject to relevant
instructions in this regard.
 All amendments of the master export LC should be noted down carefully to rule out chances of
excess obligation under the back to- back import LC.
 Back to back import LC should not be opened against LCs received for export under Barter/STA,
without prior approval of Bangladesh Bank.
22. Illustrate the regulations for the following perspective:
Inland back to back LCs:
 Inland back to back LCs denominated in foreign exchange may be opened in favor of local
manufacturer-cum- suppliers of inputs, against master export LCs received by export-oriented
manufacturing units operating under the bonded warehouse system, up to value limits applicable
per prescribed value addition requirement/utilization permit.
 However, EXP/IMP form will not be applicable in such cases unless EPZ/EZ unit is associated.
BTB import LC against inland BTB LC
Back to back LC may in turn be opened for import of necessary inputs, against inland back to back LC in
favor of a local manufacturer cum-supplier operating under the bonded warehouse system, in accordance
with the instructions.
Opening of LC in FC by exporters operating without bond license
As per decision of the National Board of Revenue, a manufacturer-cum-exporter operating without bonded
warehouse license, may open usance LC and sight LC (against advance receipts of export proceeds)
denominated in foreign exchange favoring packaging industries, manufacturers of hanger and plastic goods
operating under bonded warehouse license against all types of export contracts (sales contract, purchase
order, proforma invoice, etc.) received from abroad.
Opening LC in local currency
Hundred percent export oriented industries/direct exporters shall open and settle inland LC in foreign
currency favoring manufacturer-cum-suppliers in the above cases only. For procuring inputs from local
traders/suppliers, LC shall be opened in local currency only.

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 23. How does Payment will be settled against BTB LCs?
Payment settlement against BTB LCs:
 Payment abroad in settlement of usance bill against the back to back import LCs shall be made at
maturity, out of proceeds of the relative export repatriated in foreign exchange; the required foreign
exchange will be set aside, out of the export proceeds, in a separate foreign currency account in the
subsidiary ledger of the AD.
 Before making remittance against the back-to-back import bill, the AD should see that the
authenticated copy of bill of entry for bond in evidence of actual arrival of the relative imports has
been submitted.
 Usance bills against back to back import LCs should be settled at maturity even where for some reason
export has not taken place, or where the export proceeds have not been realized or where the realized
export proceeds net of value addition requirement is not adequate to cover the back to back import
payment.
 In such cases post facto approval of Bangladesh Bank (FEOD, Head office or other offices of
Bangladesh Bank) will have to be sought for within fifteen days of the following month of effecting
the payment, explaining fully the circumstances of export failure or non-realization/ short realization
of export proceeds, with relevant supporting documents.
 Cases of failure of export against the relative master LCs should also be reported to the NBR and the
concerned Commissioner of Customs so that they may monitor closely the level of stock of the
Relative goods in the bonded warehouse. A copy of the letter to NBR reporting the export failure
should be submitted to Bangladesh Bank along with the application for post facto approval of
remittance towards back-to-back import payment. Also, all applications for post facto approval of such
remittance in the event of export failure and short realization/non-realization of export proceeds should
be accompanied by the authenticated copy of the relative bill of entry evidencing actual receipt of the
back to back imports.
 The AD should maintain effective watch on the stock of inputs procured under the back to back
arrangement and of finished products made therewith; any indication of illegal disposal of stocks from
the bond coming to the knowledge of the AD should immediately be reported to the concerned
Commissioner of Customs and NBR
24. Illustrate the regulations for the following perspective:
A) Retention of foreign currency in single pool for back to back import payments under bonded
warehouse system
 On encashment of export proceeds equivalent to the portion of value addition, residual portion of
export proceeds against different export bills of the same export unit operating under bonded
warehouse system may be maintained in foreign currency in a single pool by the ADs.
 Funds from this pool may be used for different back to back import payments of the same exporting
unit on maturity basis to keep minimum involvement of AD's own fund under the exchange position
as well as to keep exporter free from debt burden.
25. Payment of import bills (other than back to back) from direct and deemed export earnings:
 If import bills (other than back to back LC) fall due for payment within 30 (thirty) days from the date
of receipt of export proceeds by the exporters/deemed exporters, the Ads may, on application by the
manufacturers-cum-exporters retain such proceeds in foreign exchange for a maximum period of
30(thirty) days for making such import payments even it exceeds the allowable retention quota limit.

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 However, export proceeds so retained (in excess of the usual retention quota entitlement) shall be
encashed compulsorily in Taka if the same is not utilised for such import payment within 30(thirty)
days from the date of receipt.
 To identify such transactions distinctly, ADs are required to maintain appropriate register and other
necessary records.
 FE Circular Letter No. 16 Date: October 08, 2023 (Settlement of import liabilities out
of export proceeds)
 Please refer to paragraph 42(i), chapter 7 of the Guidelines for Foreign Exchange
Transactions-2018, Vol-1 (GFET) in terms of which Authorized Dealers (ADs) are
permitted to maintain export proceeds, on encashment of value added portion, in single pool
for settlement of back to back letters of credit (BBLCs). Export proceeds are also
permissible, as per paragraph 42(ii), to be retained in foreign exchange for a period of 30
days for settlement of import bills other than BBLCs.
 02. To bring clarity in retention of value-added fund in foreign currency and usage thereof,
ADs are hereby informed that: (a) The retention facility of the value added portion for 30
days is applicable, vide FE Circular Letter No. 32 of September 06, 2022, for exporters
producing outputs against procurement of input contents under BBLCs as stipulated in
paragraph 42(i), chapter 7 of GFET.
 However, the transfer facility of retained value added portion is ceased through FE Circular
Letter No. 09 of September 04, 2023.
 (b) Paragraph 42(ii) and its subsequent circulars are applicable for exporters and eligible
local suppliers producing outputs against (i) bulk imports, and/or (ii) local contents. This
paragraph is also applicable for eligible local suppliers producing intermediate goods by
import of input contents under BBLC opened against delivery orders received in the form of
inland BBLCs. The unencumbered balance so retained is useable for specified purposes
through other ADs in terms of FE Circular No. 10, dated April 15, 2018 and its subsequent
amendments, if any. (c) Transactions through FC accounts are to remain unchanged for
industrial enterprises operating in EPZs/ EZs/HTPs.
 FE Circular Letter No. 09 Date: September 04, 2023(Settlement of import liabilities
out of export proceeds)
 Please refer to FE Circular Letter No. 32 of September 06, 2022 in terms of which value-
added portion of export proceeds is allowed to retain in foreign currency for settlement of
import payments and/or EDF liabilities against admissible bulk imports of relevant
exporters. The circular also allows designated Authorized Dealers (ADs) to transfer the fund
to other ADs considering appropriate measures for bonafide use for settlement by respective
exporters of import obligations. 02. To maintain orderly discipline in foreign exchange
transactions, it has been decided that retained fund shall be useable only by designated ADs
for settlement of bonafide payment obligations of relevant exporters.
 ADs shall, with immediate effect, refrain from transferring the fund to other ADs. In case
of the fund remaining unused, ADs shall encash the same compulsorily in Taka just after
expiry of admissible period of 30 days. However, the unused fund can, on request from
exporters, be encashed before this allowable time.

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 Chapter 8: Export Transactions
Section 1
1. What is EXP Forms?
EXP Forms means Export Forms.
2. What are the methods of receiving payments against exports?
 Cash in Advance (No restriction on limit)
 Open Account subject to payment risk coverage from foreign banks. Financial institutions/
International factoring company/ credit insurance company abroad for enterprises other than
Type A enterprises in EPZs/EZ/HTP
 Open account exports are permitted without payment risk coverage for Type A enterprises in
EPZs/EZ/HTP
 Open account but subject to BB permission.(case to case permission)
 Documentary Collection(No restriction on limit)
 Documentary Credit (No restriction on limit)

3. Articulate the regulation regarding the issuance of EXP.

As per FE circular 17, Dated 23 April, 2019 the regulation regarding the issuance of EXP are given
below:
a) EXP Forms can be issued by bank and customers.
b) Shipment details can also give by bank and customers.
c) Repartition details are to be given by bank only.
d) Within 14 days from the date of shipment of goods from Bangladesh, exporters shall submit a
signed hardcopy of the electronically submitted EXP Form together with Bill of Export duly
certified by the customs authority and relevant shipping documents covering export of goods
to ADs.

4. Illustrate the regulations for the following perspective in the context of export:
Deduction of commission, brokerage or other trade charges from export proceeds:
 Commission, brokerage or other trade charges due to be paid to foreign importers or agents by
exporters in Bangladesh relating to the particular shipment may be deducted from the relative bill
amount or the amount of the sale proceeds or remitted from Bangladesh after the full proceeds have
been realized only up to a maximum of 5(five) percent of the value of the goods.
 USD 100,000: Payment USD100, 000
 Proceeds: USD 95,000 but not Commission, brokerage or other trade charges.
 EXP Value: USD1000 but SWIFT Charge USD150; 85% <95%
 USD80,000
 Part Shipment: For all invoiced values

 In exceptional cases or where it is customary in any particular trade to pay commission in excess
of 5(five) percent by deduction from the invoice value of exports, the Bangladesh Bank may
consider applications by exporters through their banks and may grant a standing authority to permit
payment of commission in excess of 5(five) percent of the invoice value.
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  In the case of export of books, journals and magazines published in Bangladesh, the exporters can
allow without prior approval of the Bangladesh Bank discount up to 33.5 (thirty-three and a half)
percent in all of the invoice value. For allowing discount more than the 33.5 (thirty-three and a
half) percent of the invoice value, the exporters may approach to Bangladesh Bank for prior
approval.

5. Using of appropriate incoterms in export:

ADs are instructed to use appropriate Incoterms such as EXW (Ex Works), FCA (Free Carrier), FOB
(Free On Board), FAS (Free Alongside Ship), CFR (Cost and Freight), CIF (Cost, Insurance, and
Freight), CPT (Carriage Paid To), and CIP (Carriage and Insurance Paid To). These terms should be
stipulated in the relevant Letters of Credit (LCs) or sales contracts.
Not ALLOWED IN EXPORTTS: DAP, DPU & DDP

 FCA incoterm will be used in LC/contract if goods are to be delivered by exporters to the
buyer's nominated person prior to loading on board a vessel. Exporters may face additional
risks and incur extra costs if FOB term is used in such cases instead of FCA.
Exporter in Contract: FOB
But exporter handovers goods to a freight forwarder controlled by buyer before on-boarding the vessel.
FCA

6. What is the prescribed period within which payment should be received?

According to the regulations outlined, the prescribed period within which payment for exported goods
should be received is four months from the date of shipment. If the full proceeds of any shipment are
delayed beyond this period without specific authorization from the Bangladesh Bank,

7. What is the Permissible period for repatriation of export proceeds against export to
EPZs/EZs?
According to FE Circular No. 17 ,dated 11.04.2017,The permissible period for repatriation of export
proceeds against export to EPZs/EZs through land route shall be countable from the date of onboard land
transport specified in transport receipt. Accordingly, ADs shall, while EXP reporting, report this date of
transport as 'date of shipment' to Bangladesh Bank online EXP reporting module
8. What is the provision of Export of raw jute and jute goods on usance basis?
 General authorization has been accorded to ADs for allowing exports of raw jute and jute goods on
up to 360(three hundred sixty) days usance basis against irrevocable LCs confirmed at buyer's cost
from first class international banks abroad.
 The requirement of third bank confirmation may be waived if the AD is satisfied about the prospect
of receiving payment in time, taking into account the country risk, the counterparty risk (the
reputation and financial standing of the buyer) and the reputation and standing of the LC opening
bank as ascertained from standard reference sources and/or foreign correspondents of the AD.
9. Advance remittance:
 Before making any payments to the exporter against advance remittances, the AD must obtain a
declaration from the beneficiary (exporter) on the "Advance Receipt Voucher." This declaration

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 certifies the purpose of the remittance. The details of this declaration must be reported to the 'Online
ARV Reporting Module' for record-keeping and regulatory compliance purposes.

10. Illustrate the regulations of shipment for the following areas:

 Short shipments:
 Where a portion of a consignment is short shipped and the exporter consequently draws a bill or
writes an invoice for a quantity less than that entered on the original copy of the relative EXP Form
submitted to the Customs, he must make a declaration on the remaining copy of the form submitted
to the bank negotiating the bills that the shipment was partially shut out specifying the quantity
short shipped.
 In all cases of short shipments, the exporters should give notice of short shipment on the prescribed
form in duplicate to the Customs who will forward a certified copy of the notice to the Bangladesh
Bank. This notice should bear the number and date of the relative EXP form in respect of which
goods have been short shipped.
 Shipments shut out entirely:
 Where a shipment to be made by a particular vessel is entirely shut out and re-shipped by another
vessel, the exporter should apply on the prescribed form in duplicate to the Customs for permission
to alter the name of the vessel on the relative EXP form and the shipping bill, stating on the
application the number and date of the relative EXP form to which the application relates. The
Customs will forward a verified copy of the application to the Bangladesh Bank.
 Where a shipment is entirely shut out and is not being re-shipped immediately by any other vessel,
the exporter should give notice accordingly in the prescribed form in duplicate. The Customs will
forward a verified copy of the notice in respect of the shipment entirely shut out to the Bangladesh
Bank in order that the relative EXP form may be treated as cancelled.
 Shipments lost or damaged in transit:

In the event of shipments from Bangladesh being lost in transit, where payment has not already been
received either through direct remittance or by negotiation of bills under a Letter of Credit (LC), certain
procedures must be followed:
The Authorized Dealer (AD) must ensure that an insurance claim is initiated as soon as the loss is known.
This involves notifying the insurance company and providing the necessary documentation to support the
claim.

If shipments from Bangladesh are lost in transit for which payment has not already been received either by
a direct remittance or by negotiation of bills under an LC, the AD must see that an insurance claim is made
as soon as the loss is known.

 Shipments on FOB basis:

In situations where exporters arrange insurance cover and freight within Bangladesh but issue invoices on
a Free On Board (FOB) basis, Authorized Dealers (ADs) are required to verify from the bills of lading that
the freight has not been prepaid in Bangladesh. If it is discovered that either the freight or insurance has
been paid within Bangladesh despite the export documents being on FOB basis, such cases must be reported
to the Bangladesh Bank.

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 FOB : Freight Collect but Freight Paid

11. Illustrate the Export proceed realization certificate against direct and deemed exports
Sometimes exporters are required to submit evidences of export and realization of export proceeds to
various government agencies against direct and deemed exports.
 In such cases, Ads may issue Proceed Realization Certificate (PRC) against direct and deemed export
(as the case may be) after being confirmed about the realization of such proceeds.
12. What are the regulations of Export of software, data entry/processing and other services?
a) Where export is undertaken in physical form: As in the case of merchandise exports, EXP procedure
shall be followed where export is undertaken in physical form, that is, where computer software and data
entry/data processing services are exported in compact disk, flash drive, tape etc.
b) Where export is undertaken in non- physical form: EXP procedure will not be applicable for export
undertaken in non-physical form such as V-Sat, Internet or other electronic media.

13. Repatriation of export proceeds through OPGSPs: This facility shall only be available for
service export in non-physical form of value not exceeding USD 10,000 (USD Ten thousand).
14. What are the instruction for ADS for Discounting of direct and deemed export bills in
foreign exchange?
Discounting of direct and deemed export bills in foreign exchange:
Beneficiaries of usance export bills against direct and deemed exports of products produced in
Bangladesh may arrange to discount bills for immediate financing through their own AD banks. ADs may
arrange fund against the discounting of usnace bills in foreign exchange through their own
OBUs/correspondent banks, financial institutions abroad or international financing institutions;

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