The central bank has issued a guideline note asking authorized dealer (AD) banks to take appropriate safeguards for export trade, officials concerned said.
The AD banks have been reminded about the risk factors for cross-border transactions in terms of foreign exchange risk management guidelines, restrictions on establishment and conducting transactions with shell banks and preventive measures under trade-based money laundering guidelines, according to a notification issued by the Bangladesh Bank (BB) on Tuesday.
"It will work as safeguards both for the AD banks and exporters," a senior BB official told the FE while explaining the main objective of the notification.
The central bank also outlined instructions for export transactions under letters of credit (LCs) and sales contracts.
For export under LCs, the banks shall satisfy themselves of bonafide applicant banks/issuing banks in case of LCs received through authenticated channels from third banks, it added.
In such case, the AD banks need to be ensured that applicant banks/issuing banks will receive export documents directly from respective ADs or through third banks/other authenticated banks with whom respective ADs maintain appropriate relationship.
In case of transferred LCs, the BB asked the banks to satisfy themselves of bonafide first beneficiary and transferring bank in addition to the LC applicant banks/issuing banks, according to the notification.
For export under sales contracts, the AD banks shall conduct due diligence regarding importers' banks designated for the transactions under sales contracts for being ensured of their step by step responsibilities regarding release of export documents to importers and procedural arrangements of payment as per foreign exchange regulations and relevant provisions of the prevailing uniform rules for collection, it noted.
The AD banks have also been asked to be ensured that importers' banks will receive export documents directly from respective AD banks or through third banks/other authenticated banks with whom respective AD banks maintain appropriate relationship.
The central bank also asked the banks to guide exporters in case trouble to comply with instructions or any doubt regarding the transactions so that they can arrange to change designated banks of importer, to bring the transactions under external payment guarantees along with similar guarantees.