Banks asked to follow rules to recover assets from machinery importers:Daily Sun

 Bangladesh Bank (BB) has given a reminder to the banks regarding recovery of respective assets invested in import of capital machinery within the stipulated timeframe of 360 days. A BB official said the reminder was issued after the central bank authorities found that many importers could not make repayments timely and pursuing Bangladesh Bank for further time extension. Deferred payment is a loa
n arrangement in which the borrower is allowed to start paying back the banks at some specified time in the future. In a circular issued on Tuesday, the Foreign Exchange Policy Department (FEPD) of the central bank said the authorised dealers (ADs) may establish LCs (letters of credit) for import, inter alia, of capital machinery on up to 360 days of deferred payment. ADs are hereby reminded that this permission is intended for only where an importer is actually able and willing to settle payments within 360 days without asking for further rollover of debt. The circular noted that the differed payment period will be of 360 days for borrowing from local banks’ authorised dealers from the date of disbursement. The timeframe, however, may be beyond 360 days against external borrowing proposals approved by the Board of Investment (BOI) Scrutiny Committee. The FEPD of the central bank has asked banks for appropriate compliance in this regard.