Bangladesh Bank (BB) has allowed foreign firms and joint ventures (JVs) located in the economic zones (EZs) to take working capital loans in taka from the domestic banking system for their operations catering for the local market.
"Industrial enterprises operating in the domestic processing areas of the economic zones do not have sources of income in foreign currencies. To facilitate the business, the central bank issued a circular in October 2020, allowing them to execute transactions in the taka without export/import procedures and remit the payment on account of royalty, technical know-how and technical assistance fees from their taka accounts respectively," as per a BB circular issued on Monday.
To further meet their working capital needs, it has been decided that Type A and Type B industrial enterprises operating for marketing their products in the domestic market only and with no sources of income in foreign currencies are allowed to access working capital loans in the taka from the local banking system, reports BSS citing the circular.
Firms with 100 per cent foreign ownership are considered ‘Type A’ and joint venture companies with foreign and Bangladeshi ownership are treated as ‘Type B’.