Bangladesh Bank (BB) has consolidated its foreign-exchange rules on loans, overdrafts and guarantees into a single circular, bringing under one framework provisions governing domestic and overseas borrowing, foreign currency loans and guarantees for cross-border transactions.
The new circular, issued on Wednesday, will remain effective for one year, replacing the previous consolidated instructions issued on the same date in 2025.
It also incorporates regulatory changes made over the past year, including provisions allowing access to domestic financing against overseas bank guarantees or standby letters of credit (SBLCs).
Another provision incorporated into the framework allows local partners, agents or authorised representatives of foreign companies awarded contracts through international tenders to arrange foreign-currency guarantees or SBLCs through authorised dealer banks in favour of project authorities or procuring entities in Bangladesh.
The consolidated circular is divided into three parts.
Part A covers loans, overdrafts and guarantees, including commercial lending, private-sector borrowing backed by overseas guarantees or collateral and different categories of guarantees issued for residents and non-residents.
Part B sets out financing rules for enterprises operating in specialised economic zones. It covers foreign-currency loans for Type A, B and C enterprises as well as Taka financing for eligible Type B and C enterprises.
Part C deals with overseas borrowing by resident entities, including private and public-sector enterprises, and guarantees issued for repayment of foreign loans.
However, foreign-owned or foreign-controlled companies seeking borrowing facilities will also have to comply with the separate instructions issued by Bangladesh Bank’s Foreign Exchange Investment Department on 15 July 2026.
The consolidation brings the relevant rules governing both funded and non-funded foreign-exchange transactions under a single regulatory framework, reducing the need for banks and businesses to refer to multiple circulars issued at different times.
The circular will remain effective for one year from the issuing date.
