The Bangladesh Bank has taken an initiative to pay import bills in advance and allowed scheduled banks to clear such payments also through their offshore banking units.
The initiative has been taken to make the payment of such expenditure faster and easier due to an increase in imports, the Foreign Exchange Policy Department (FEPD) of the central bank said in a circular on Thursday.
It said banks having permission for foreign exchange transactions can pay up to $5,000 in advance import bills on behalf of an importer against the appropriate guarantee, without the prior approval of the central bank.
In the same way, offshore banking units or any external financiers of the banks can pay import bills of that amount.
In this case, banks have to make sure that the offshore units or the external financiers pay the import bills properly.
The Guidelines for Foreign Exchange Transactions (GFET) state that during the payment of advance import bills without the prior approval of the central bank, importers must show proper contracts of purchase with their foreign suppliers.
It said if goods do not arrive due to any problem of suppliers, banks will not be liable. On the other hand, if products do not arrive for any reason after the payment by a bank, the importer has to pay the money.
In addition, banks have to receive customs clearance to know whether importers have not paid any import bills for the previous four months.
The banking system in which funds are created in foreign currency from foreign sources and those funds are managed and maintained under international laws is known as offshore banking.
Offshore banking is a separate banking system within banks.