Bangladesh Bank Eases Retention Rules for Export Proceeds in Specialized Zones

Under this circular, the Bangladesh Bank has relaxed foreign currency retention rules for Type B and Type C industrial enterprises operating in specialized economic zones, including export processing zones (“EPZs”), private EPZs, economic zones, and high-tech parks. With this update, the central bank has brought the retention facilities of specialized zone exporters in line with those of non-specialized exporters, addressing earlier restrictions that often created operational challenges.

Under the revised framework, banks may now allow enterprises in these zones to retain their full repatriated export proceeds in a foreign currency back-to-back settlement pool until import payments are made. The retained amount may include both the back-to-back import settlement portion and the local value-added portion. The latter can be held for up to 30 days for settlement of eligible foreign currency obligations. During this period, exporters may also transfer unutilized funds to other authorized dealers to settle import liabilities of their subsidiaries or sister concerns within specialized zones.

If funds remain unused after 30 days, at least 20%—25% in the case of the garment sector—of total repatriated proceeds must be encashed into BDT. The balance may then be credited to the exporters’ foreign currency accounts. Exporters without back-to-back arrangements are granted the same facility, with the option to retain proceeds for 30 days for admissible uses, including transfers to other banks for import payments of related enterprises in specialized zones. Any unutilized funds beyond this period may also be credited to exporters’ foreign currency accounts, subject to the same minimum encashment requirement.

This policy development enhances liquidity management and provides greater flexibility for enterprises in specialized zones, while maintaining regulatory oversight through mandatory encashment provisions. Exporters are advised to align their compliance and reporting mechanisms with the updated guidelines to fully benefit from these changes.