Govt authorisation no longer required to settle LC payment
Authorised dealer (ADs) banks can now settle letter of credit (LC) payment in foreign currency against local supply of goods under international tender without government authorisation.
Earlier ADs could settle an LC payment only on behalf of government authorities.
The Foreign Exchange Policy Department of the Bangladesh Bank issued a circular to this end on Wednesday.
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According to the circular, Ads were given the facility by amending paragraph 35 of chapter 7 of the Guidelines for Foreign Exchange Transactions (GFET)-2018, volume-1.
The amended paragraph reads, "ADs may establish letter of credit in foreign currency favouring local contractor to execute work order provided under international tenders."
"Such LCs established in foreign currency shall be settled through foreign currency clearing accounts of the concerned bank that is maintained with the Bangladesh Bank," it adds.
