• Tuesday, Sep 17, 2019
  • Last Update : 02:39 pm

BB permits foreign businesses sending interest payment in foreign currency

  • Published at 10:44 pm August 22nd, 2019
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The Bangladesh Bank building at Motijheel Mehedi Hasan/ Dhaka Tribune

The payment could be made in their own currencies subject to the deduction of advance taxes and duties

Bangladesh Bank (BB) yesterday granted permission to foreign-owned manufacturing entities operating in the country to pay interest against short-term borrowing sourced from their parent companies or shareholders.

The payment could be made in their own currencies subject to the deduction of advance taxes and duties.

In this regard, the exchange rate shall be determined against the taka on the date of repayment, said a circular issued from the foreign exchange policy department (FEPD).

The circular says short-term interest bearing loan facility from parent companies and/or shareholders abroad shall be admissible for maximum three years from the date of  manufacturing activities by the borrowing industrial entities.

The short-term loan so availed may be renewed/ extended for further periods within the applicable period of three years, it elaborated.

The FEPD says the repayment of principal and accrued interest on maturity could be repatriated  after conversion of payable taka into currency of sourced country at the prevailing exchange rate.

According to the guidelines for foreign exchange transactions-2018 (vol-1), the BB allows  interest-free loans from parent companies/shareholders to foreign owned/controlled industrial enterprises in Bangladesh for up to one year.