Approval of Bida must for refinance, deferred payment for imports

Highlights-

• Importers need approval for
• Extending the time period for paying off the price of imported goods
• Taking loans arranged by the foreign suppliers
• General importers will seek permission from the Bangladesh Investment Development Authority

Industries registered with the Bangladesh Investment Development Authority (Bida) have to take Bida's permission from now on if they need more than a year to pay off the price of imported goods or if they take loans arranged by foreign suppliers.

Bangladesh Bank said on Tuesday in a circular regarding the approval for refinance and the deferred payment of the imported goods' price.

The circular said the importers have to submit applications to Bida at least one month before the time period for paying off the dues ends or before receiving the refinancing from the foreign supplier.

Previously, the Bangladesh Bank's approval regarding these issues was sufficient for the importers.

According to central bank and Bida sources, the authorities have taken the decision to reduce the cost and time of doing business, but some businesspersons wondered whether it has added another step in the process of importing goods with its latest decision.

Asked about the matter, former president of the Dhaka Chamber of Commerce and Industries Abul Kashem Khan told The Business Standard that if the approval of the Bida or Department of Textiles suffices for importing goods, then the process would be easier for the importers.

But, if the importers have to go to the central bank again after getting the Bida's approval, it will be an additional step for them. Kashem opined that it was necessary to clarify in the central bank's circular whether the bank would accept the approval of Bida or the Department of Textiles.

Asked about the circular, a central bank official said, "Suppose an importer imports sewing machines from Taiwan for a garments factory on condition of keeping the price due for a year. But for some reason the importer is not able to pay his dues within the stipulated time or he needs more time to pay off the price due to the Covid-19 pandemic."

"In this case, if the machine supplier in Taiwan allows more time for the importer, then the importer has to get approval of Bida for this extra time," the central bank official continued.

"On the other hand, if the supplier arranges a foreign loan for the importer to repay the debt without extending the time, the importer still has to take the approval of Bida for the loan," he added.