Bangladesh Bank (BB) has increased the limit for advance payments on imports, offering businesses greater flexibility in conducting international trade.

In a circular issued on Tuesday, the central bank declared that importers are now allowed to make advance payments of up to $20,000 without requiring repayment guarantees, double the previous cap of $10,000.
“To further simplify trade transactions, it has been decided to enhance the aforesaid limits to $20,000 and $50,000, respectively,” the statement reads.

Additionally, the limit for payments from exporters’ retention quota (ERQ) accounts has also been raised to $50,000, up from the previous cap of $25,000.

According to BB officials, the move is intended to streamline trade transactions and reduce the burden on businesses importing materials and machinery from overseas. The central bank also emphasized that all other conditions related to advance payments will remain the same.

Bankers expressed support for the decision, affirming that the earlier limits frequently posed challenges for small and medium-sized importers, particularly amid global supply chain volatility.

The increased ceiling is anticipated to minimize procedural delays and facilitate more efficient settlement of international contracts. Bangladesh Bank has directed all authorized foreign exchange dealers to promptly notify their clients of the revised payment limits.

The directive comes at a time when businesses face tight liquidity and exchange rate fluctuations, with the eased limits viewed as a much-needed relief. By allowing greater flexibility for advance payments, the central bank aims to boost confidence in trade financing and streamline import processes.

The step is anticipated to relieve challenges for businesses involved in international trade by offering increased adaptability in handling cross-border transactions.

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