Overdue import bills down to $88m from $445m in five months
A recent report by the Bangladesh Bank revealed that a number of banks had failed to settle their import payment dues to foreign banks for a long time. However, due to intensified monitoring and intervention, the situation has improved significantly
The overdue import bills of several Bangladeshi banks have dropped significantly, from $445 million to $88 million, over the past five months, following special monitoring efforts by the central bank.
A recent report by the Bangladesh Bank revealed that a number of banks had failed to settle their import payment dues to foreign banks for a long time. However, due to intensified monitoring and intervention, the situation has improved significantly.
Meanwhile, in a circular issued today (13 April), the central bank directed all banks to closely monitor the settlement of overdue import bills, both foreign and local. Banks have also been directed to submit monthly reports of overdue bills through the Online Import Monitoring System (OIMS).
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The circular further noted that failure to settle import bills on time damages the reputation of the country's banking system and disrupts a favourable environment for foreign trade by increasing costs.
The central bank, citing the Guidelines for Foreign Exchange Transactions (GFET) 2018, stated authorised dealer (AD) banks are required to settle both foreign and local import bills within the stipulated timeframe. Non-compliance could result in the cancellation of the AD branch's licence, the circular warned.
The circular further warned that individuals involved in such transactions may be held personally accountable if delays persist.
A senior official of the central bank said, "At the end of November last year, the total overdue amount for foreign import bills stood at $445 million.
"We held regular monitoring and follow-up meetings with banks that had higher overdue payments. After each meeting, clear instructions were sent to the concerned banks, along with deadlines to take corrective actions."
According to the central bank report, as of January 31, 2024, overdue foreign accepted bills had come down to $200 million. That figure has now further dropped to $88 million.
The report also highlighted progress in clearing local bills under bank-to-bank letters of credit (LCs). These domestic dues have fallen from $311 million in November to $153 million.
According to a separate report from the central bank's spokesperson, it has been decided to hold bi-monthly meetings with deputy managing directors and other officials of 10 banks with the highest volume of overdue bills.
Additional directives issued today call for banks to prepare integrated action plans to clear overdue amounts. Branches with larger outstanding payments have been instructed to implement special monitoring mechanisms.
Furthermore, in cases where bills are under legal proceedings and cannot be settled, banks have been advised to notify the suppliers' banks accordingly.
Any discrepancies flagged by AD branches related to import bills must also be recorded and reported to the bank's head office on a monthly basis.
