The central bank relaxed foreign-exchange regulations allowing all C- category industries in the Export Processing Zones (EPZs) to borrow from the Export Development Fund (EDF). Under the relaxed rules, the commercial banks are now allowed to extend their foreign-currency loans under the EDF to Type-C industries in the EPZs. “It has been decided that the EDF loan will be admissible against back-to-back import LCs (letters of credit) for input procurement by Type-C industries in EPZs,” the central bank said in a circular Sunday. Talking to the FE, a senior official of the Bangladesh Bank (BB) said the central bank relaxed the foreign-exchange regulations aiming to facilitate all C-category industries in the EPZs to take low-cost EDF loan. He also said it will help all such industries located in the EPZs to meet their short-term liquidity requirements. Earlier on May 27 last, the BB increased the allocation for the EDF by more than 33.33 per cent to US$ 2.0 billion from $1.5 billion to cater to a growing demand from exporters. Currently, the exporters are allowed to get such foreign-currency loan on payment at the London Inter-Bank Offered Rate (LIBOR) plus 2.50 per cent interest. Under the existing provisions, the EDF financing is allowed for input procurement against back-to-back import LCs or inland back-to-back LCs in foreign exchange. Manufactures producing final output for direct export and also producers of local deliveries to manufacturers of the final export are entitled. The EDF loans from the central bank are payable by the banks upon receipt of export proceeds within 180 days from the date of disbursement, extendable by the BB up to 270 days in case of a longer period for repatriation of export proceeds. Besides, the central bank of Bangladesh earlier had relaxed the foreign- exchange regulations allowing all industrial enterprises in the EPZs to borrow medium-and long-term loan from overseas sources. There are three categories of industrial units now operating in all EPZs across the country. A total of 66 B-category (joint venture) industrial units are in operation while 135 Cs (100 per cent locally owned) in the EPZs. Besides, 250 A-category (fully owned by foreigners) units are now operating in the special zones of the country. “More than 450 industrial units are now operating in the EPZs while 87 are under implementation,” an official of the Bangladesh Export Processing Zones Authority (BEPZA) told the FE. There are eight EPZs in Bangladesh, namely Chittagong, Dhaka, Mongla, Ishwardi, Comilla, Uttara, Adamjee, and Karnaphuli.
