STAR BUSINESS REPORT

In a move to broaden access to trade finance, Bangladesh Bank (BB) has amended key provisions of its directive governing offshore banking units (OBUs).

The central bank issued a notice yesterday, modifying the OBU guidelines to allow greater flexibility in extending trade finance facilities through authorised dealer (AD) banks.

Under the earlier framework, OBUs were permitted to provide trade finance to enterprises located in specialised and non-specialised zones, arranged through their own bank’s ADs, in the form of buyer’s credit, accepted bill financing, and similar instruments. The latest amendment, however, significantly widens this scope.

According to the revised provisions, OBUs can now extend trade loans not only through ADs of their own banks but also through ADs of other banks, subject to comprehensive risk assessments — including counterparty exposure and limit evaluations.

This represents a major step towards enhanced interbank collaboration in offshore financing operations, according to BB officials.

For enterprises located in specialised zones, OBUs are now allowed to finance entities other than fully foreign-owned ones, arranged through both their own ADs and those of other banks, in the form of admissible trade finance instruments for the permissible tenure.

Such financing must comply with existing prudential credit norms and due diligence requirements.

Likewise, for enterprises located in non-specialised zones, OBUs can now extend buyer’s credit, accepted bill financing, and other permissible trade instruments through both their own ADs and those of other banks, following proper risk evaluation procedures.