Business News

Central bank eases EDF financing process

The central bank has eased the process of the Export Development Fund (EDF) to
facilitate access to financing in foreign exchange for input procurements by
manufacturer-exporters. A Bangladesh Bank (BB) circular on Sunday said, “To bring ease
in operations of EDF, revised operational procedure prepared through compilation of
existing instructions.”
The Authorised Dealer (AD) banks can borrow US dollar funds from the EDF against
their foreign currency loans to manufacturer-exporters for input procurements. At their
option, the ADs can also lend to some extent from their own foreign exchange funds for
input procurements.
The EDF is managed by the Forex Reserve and Treasury Management Department
(FRTMD) at the BB headquarters. Borrowing by ADs from the EDF and repayments
thereof are handled through head offices or principal offices of the AD banks concerned.
The ADs working under Shariah financing mode may also avail financing facilities from
the EDF complying with Shariah principles. In this case, they may enter deal to deal
Restricted Mudaraba Agreement with FRTMD for Shariah compliance against their EDF
investment.
According to BSS, EDF loan disbursements to ADs in USD will be charged interest at sixmonth
USD LIBOR+1 per cent, with the ADs charging at six-month LIBOR+2.5 per cent
on their USD loan disbursements to manufacturer-exporters. The EDF loans from BB are
repayable by the ADs upon receipt of proceeds of the relative exports (except in case of
loans for bulk imports by member mills of eligible associations against past export
performance); in all cases within 180 days from dates of disbursement, extendable by BB
up to 270 days upon application to Bangladesh Bank explaining the necessity of longer
period for repatriation of export proceeds.
Source: http://thefinancialexpress.com.bd/economy/central-bank-eases-edf-financingprocess-1514735388



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