Bangladesh Bank has eased regulations on the import of capital machinery under buyer’s credit to promote long-term investment. Previously, industries were allowed to import capital machinery on a 360-day usance term. Under the new rules, banks can now permit industrial importers to import such machinery on usance terms for up to three years, utilizing supplier’s or buyer’s credit, as announced in a notification today.
Buyer’s credit refers to a short-term loan provided by an overseas lender, such as a bank or financial institution, to finance the import of capital goods and services. A senior BB official stated that the relaxation aims to benefit small and medium-sized enterprises.
The decision follows a meeting of the central bank’s scrutiny committee on foreign loans and supplier’s credit, chaired by the BB governor. The revised usance tenure will also apply to industrial enterprises importing capital machinery in export processing zones (EPZs), private EPZs, economic zones, hi-tech parks, and other specialized zones designated by the government, according to the notification.
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