Extension of Credit / Remittance Facilities to Type-B Industries in the EPZ

(Bangladesh Bank F.E. Circular No. 79, dated 21 December 1993)
Foreign partners of joint venture companies known as Type-B industries are
now required to supply machinery and equipment to set up industries in the
Export Processing Zones (EPZs).
It has been decided that in the case of joint venture projects in the EPZs, the foreign
partners will have to arrange their contributions in foreign exchange from own
or borrowed sources outside Bangladesh and local partners may similarly
contribute their shares in local currency. In the event, however, the
contributions as per joint venture project agreements made by the foreign
partners are not sufficient to cover the cost of machinery and equipment, the
the shortfall may be made up, with the Bangladesh Bank's approval, by conversion
of taka into foreign currency up to an amount not exceeding the local partners'
shares/contributions referred to above.
Authorized dealers may also extend local currency loans on the basis of banker

customer relationship without prior approval of the Bangladesh Bank within the
limit of the contribution of the local shareholders of Type-B industries as per
project agreement. Foreign exchange released for import of machinery along
with interest of any loan granted to them for this purpose will require be
adjusting/repaying out of the foreign exchange earnings of the concerned
industries.
Other instructions regarding the extension of credit/remittance facilities to the
different types of industries in the Export Processing Zones will remain
unchanged.
7.15 Deposit of Export Earnings in Fc Account of Type-A & Type-B
Industries in EPZS
(Bangladesh Bank FE Circular No. 25, dated 16 July, 1989)
In partial modification of the instructions contained in para 4(I) and (ii) of FE
Circular No. 37 of 1983, it has been decided that:
(a)    The existing provision for deduction of 5% of the C&F / FOB value of
each export consignment in respect of Type-A industries in the Export
Processing Zones in withdrawn. Henceforth, Type-A industries of EPZs shall
be allowed to deposit 100% of their export proceeds in a foreign currency
account maintained with an authorized dealer in Bangladesh.
(b)    Type-B industries of EPZs (joint venture enterprises) other than garments
industries shall, henceforth, be allowed to deposit 70% (seventy percent) of
their export value in their foreign currency accounts without prior permission
of the Bangladesh Bank and the remaining 30% (thirty percent) will continue to
be deposited in local currency accounts at official rate of exchange.
7.16 Deposit of Export Earnings in Fc Account of Type-B Industries In
EPZS
1. (Bangladesh Bank FE Circular No. 33, Dated 4 September, 1989)
Attention of the authorized dealers is invited to FE Circular No. 25 dated
16.07.89.
02. The following instructions are issued in cancellation of the instructions
contained at item (b) of the 1st paragraph of the Circular referred to above:
Type-B industries (joint venture) of EPZs other than garments industries shall
be allowed to deposit 70% of each of their exports earnings in their foreign
currency account without prior permission of the Bangladesh Bank and the
remaining 30% will be encased at SEM rate and deposited in their local
currency accounts. The foreign currency so purchased by the authorized dealers

will be sold to be the SEM fund of the Bangladesh Bank as per instructions
contained in para (3) of FE Circular No.15, dated 17 March, 1988.
In case, expenses representing the cost of imported raw materials, spares and
other foreign exchange overheads applicable to each export consignment
exceed 70% of the export proceeds of the related consignment, applications
may be submitted to the Bangladesh Bank with relevant documents for
purchasing funds at SEM rate out of the remaining 30% of export proceeds
encased at SEM rate. In case of Type-B garments industries in the EPZs, 75%
of the export proceeds will continue to be credited to their foreign currency
accounts as per provisions of FE Circular No. 66, dated 23.8.84 and the
remaining 25% will be credited to their local currency accounts. For
encashment of 25% of the export proceeds in these cases, the instructions
contained in FE Circular No. 15, dated 17.3.88 will apply.
7.17 Deposit of Export Earning in Fc Account of Type-C Industries in
EPZS
(Bangladesh Bank FE Circular No. 18, dated 15 May, 1994) Attention of the
authorized dealers is invited to article 4 (3) of the FE Circular No. 37, dated 10
May, 1983.
It has been decided that all the Type-C enterprises of the Export Processing
Zones will be able to deposit their export value in foreign currency (FOB
value) of their FC account directly after deducting the amount of value
addition.
They will not require prior permission of the Bangladesh Bank for this
purpose.
7.18 Operation of Fc Account by Type-B and Type-C Garments
Industries in EPZS
(Bangladesh Bank FE Circular No. 66, dated 23 August, 1984)
In partial modification of the instructions contained in para 4(ii) and 4(iii) of
the Bangladesh Bank's FE Circular No. 37, dated 10 May, 1983, it has since
been decided that the authorized dealers may credit to the FC account to Type-
B or Type-C garments manufacturing units in the EPZs an amount not
exceeding 75% of the C&F / FOB value, as the case may be, of each export
consignment realized without prior permission from the Bangladesh Bank. The
remaining 25% shall be credited to a local currency account at the official
exchange rate.
Withdrawals may be made freely by the Type-B and Type-C garments of the
EPZs from the foreign currency account maintained by them for local

disbursement as also for remittance abroad for importation of capital machinery
and raw materials, payment of service charges and royalty, repayment of loans
etc.
7.19 Operation of Fc Account by Type-B and Type-C Industries in EPZS
(Bangladesh Bank FE Circular No. 21, dated 2 August, 1995)
Attention of the authorized dealers is invited to para (b) of F.E. Circular No. 25
of 1989 and F.E. Circular No. 18 of 1994.
In partial modification of the instructions contained in the above F.E. Circulars,
it has since been decided that the Type 'B' and Type 'C' industries, other than
the garment units of the EPZs, who shall use only imported raw materials, shall
henceforth be allowed to deposit in their respective foreign currency accounts
up to 80% of the C&F / FOB value of each export consignment released
without prior permission from the Bangladesh Bank. The remaining 20% shall
be credited to the local currency accounts at the official exchange rate.