Banks can discount export bills with own fund
This will help exporters manage their working capital needs
Authorised dealer banks can now discount usance export bills in foreign exchange from their own sources if the fund is not committed for otherwise use.
The Foreign Exchange Policy Department of the Bangladesh Bank issued a circular in this regard on Sunday, facilitating exporters to manage their working capital needs.
"Export Bill discounting supports exporters to receive the proceeds before maturity. This will help them manage their working capital needs," said an official at the central bank.
Earlier, the dealer banks were allowed to arrange fund for discounting usance export bills in foreign exchange through their correspondent banks, financial institutions abroad or international financing institutions.
Export Bill discounting is commonly used in international trade. This is one type of financing where customers sell the drafts under a usance letter of credit (LC) accepted by the issuing bank or documentary collection drafts prior to the maturity of such drafts while bank pays customers the amount of the face value of the bills less the discount charges and related fees.