Exporters are required to reserve a portion of the advance payment received from foreign buyers. This rule has now been relaxed. Bangladesh Bank has withdrawn the long-standing obligation to reserve 10 percent of advance export earnings received from foreign buyers. This obligation was removed today, Thursday, through a notification.

Central bank officials said this initiative was mainly taken to increase exporters’ cash flow and to facilitate export trade. The new directive includes necessary safeguards to ensure genuine transactions.

According to the new instructions from Bangladesh Bank, exporters must have a confirmed Letter of Credit (LC) or contract based on which the goods will be exported. The exporters’ previous export performance must be satisfactory, and they must have sufficient capacity to fulfill the order. Additionally, the advance payment received must be interest-free.

According to the business community, this relaxation will help exporters continue their raw material procurement and production activities, while banking supervision will ensure compliance with rules and regulations.