BB widens access to finance against Offshore Banking Unit-held foreign currency deposits
Previously, the provision allowed such foreign currency balances to be used as collateral only against short-term working capital financing in local currency for resident companies, firms and individuals.
The Bangladesh Bank has widened the scope of financing against foreign currency deposits held with Offshore Banking Units (OBUs), allowing such balances to be used as collateral for a broader range of loans in local currency.
The central bank issued a circular today (3 September) modifying existing provisions on the use of balances held in private foreign currency accounts and non-resident foreign currency deposit accounts as collateral.
According to the circular, issued by the Foreign Exchange Policy Department-1, balances held in private foreign currency accounts and non-resident foreign currency deposit accounts maintained under Sections I and II of Chapter 13 of the Guidelines for Foreign Exchange Transactions (GFET) may now be used as collateral against short-term working capital financing in local currency to resident companies, firms and individuals.
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The balances can also be used as collateral against short-term finance or consumer finance in local currency for resident persons and non-resident Bangladeshis (NRBs), subject to compliance with existing regulatory instructions.
Previously, the provision allowed such foreign currency balances to be used as collateral only against short-term working capital financing in local currency for resident companies, firms and individuals.
The latest move is aimed at widening financing options against foreign currency balances maintained with OBUs and providing greater access to local-currency financing against such deposits.
The circular referred to an earlier Foreign Exchange (FE) Circular No 27, issued on 3 July 2025, under which OBUs could allow foreign currency deposits of non-resident account holders to be used by their respective Domestic Banking Units (DBUs) as collateral against financing to resident companies, firms and individuals.
It also reiterated that balances held in private foreign currency accounts and non-resident foreign currency deposit accounts may be used as collateral in accordance with the relevant provisions of the Foreign Exchange Regulation Act, 1947 and the GFET.
Bangladesh Bank said all other instructions contained in the earlier circular would remain unchanged.
