Import Payment Thru Tt
Banks can pay up to $5,000 in advance without BB nod
Bangladesh Bank has said authorised dealer branches of scheduled banks will not require prior approval from the central bank to make advance payment for import through telegraphic transfer up to $5,000 against foreign suppliers. To this end, the BB on Wednesday issued a circular to authorised dealer branches in foreign exchange saying that from now on the ADs would be able to make the advance payment through the TT for all types of import without requiring repayment guarantee.
The foreign suppliers usually provide a bank repayment guarantee against the advance payment of importers so that such type of payment remains secured, a BB official told New Age.
Under the repayment guarantee process, the guarantor banks will ensure the importers to back the advance payment if in any case the suppliers or exporters fail to send the goods.
The exporters and the importers make transaction through the TT without opening letters of credit. The TT transaction gains popularity in Western Europe and North America as it helps the business people avoid the complexity in opening and settling of the LCs.
The BB circular said that the central bank had taken the move with a view to liberalise the country’s foreign exchange regime.
The banks were earlier allowed to make advance payment up to $2,500 for import of only books, journals and life saving medicines.
The BB set a number compliance for importers to make the advanced payment.
The ADs will have to be ensured that the applicant importers for advanced payment do not have bill of entry or customs certified invoice pending for submission beyond the stipulated period of four months against any earlier payment for imports, the circular said.
The ADs will have to be satisfied that repayment guarantee is not obtainable from the suppliers against the payment to be made in advance.
The ADs will, at their own responsibility, have to arrange for repatriation of the payment made in advance in case the entry of goods into the country is not affected within the stipulated time.
Before effecting the advance payment, ADs shall obtain Form of Undertaking duly filled in and signed by the importer, the BB circular said.
-With New Age input
