How exporters can turn a usance bill into cash today, and how banks can protect themselves.
An exporter who has shipped on 90-day terms still has to pay workers this month. Waiting three months is hard. Bill discounting lets the exporter get cash now, while the foreign buyer still pays later.
The rules allow this, with limits on cost, so that the promise to bring the money home stays intact.
Exporters with usance bills from direct or deemed exports of goods produced in Bangladesh can have them discounted through their bank:
A USD 100,000 bill is payable in 90 days. If SOFR is, say, 4%, the all-in cost for the exporter can't go above 7% a year. Every fee counts in that 7%, even the small "processing charge".
Beneficiaries of usance export bills against direct and deemed exports of products produced in Bangladesh may arrange to discount bills for immediate financing through their ADs, subject to compliance with the following instructions:
(a) ADs shall have to be ensured that the usance bills presented for discounting are derived from bonafide direct/deemed export transactions;
(b) ADs may arrange fund against the discounting of usance bills in foreign exchange through their own fund/OBUs/correspondent banks, financial institutions abroad or international financing institutions;
(c) Expenses of the customers for discounting bills shall not exceed mark-up of 3.00 percentover benchmark rate, e.g. SOFR, Euribor etc. (all in cost) including all types of commissions/charges/fees/interests;
(d) Proceeds from such discounting may be retained in relevant single pool for import payments/back to back liabilities. Type C enterprise of specialized zones can avail this facility under the stipulations in this regard.
Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part A, paragraph 30 (page 17). The original circular is the authority.
An exporter may assign (sign over) their right to a usance bill to a licensed bank or financial institution abroad, if that institution has fully prepaid the bill as a final, without-recourse settlement, following the A-30 rules. This is general permission, so no separate approval is needed.
A foreign bank pays the full bill today and agrees that if the buyer later doesn't pay, it won't come back to the exporter. That is "without recourse". The money has come home, so the promise is kept.
General permission is granted to assign an exporter's rights to a usance export bill in favor of a licensed bank or financing institution abroad, provided the institution has fully prepaid the usance bill as a final and without-recourse settlement, subject to adherence with the instructions outlined in paragraph 30 above.
Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part A, paragraph 31 (page 17). The original circular is the authority.
When a bank discounts bills with recourse, it may, if it chooses, buy insurance from local insurers as extra comfort, with the exporter's consent. The same idea can protect funded or non-funded facilities before shipment.
But insurance does not cancel the duty to bring the money home. Repatriation rules still apply.
Insurance is like a helmet: it protects you in a fall, but it doesn't make red lights optional. Even with cover, the export money must still come home on time.
(1) ADs may, at their option, safeguard their financing against bill discounting on recourse basis by appropriate insurance coverage available from insurance companies locally as an extra comfort. Before obtaining insurance coverage, ADs should take consent from exporters in this regard.
(2) Besides post shipment financing, the proposition of offsetting the default risk by appropriate insurance coverage may be adopted against funded or non-funded facilities to exporters at pre-shipment stage.
(3) Financing safeguard by insurance coverage will not give waiver from realization of export proceeds. Hence, export proceeds need to be repatriated as per requirement of foreign exchange regulations in force.
Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part A, paragraph 32 (page 17). The original circular is the authority.
Well done, you've finished Part A! You now know the whole story: who makes the rules (Lesson 1), the promise to bring money home (2), how it may come in (3), the EXP journey (4), who holds the key to the goods (5), the allowed cuts (6), what happens when things go wrong (7), reporting and PRCs (8), and how to get paid early (9). The next parts of the export room will build on exactly these ideas.
Four quick questions. Nobody sees your answers but you.
A-30(c): mark-up of 3.00 percent over benchmark rate, all-in.
A-31: the institution must have fully prepaid the usance bill as a final, without-recourse settlement.
A-32(3): insurance does not waive repatriation of export proceeds.
A-30 covers usance bills against direct and deemed exports of products produced in Bangladesh.
Anonymous. It only adds one to a count, so we know who the lessons are helping. We never learn who you are.
Brain feeling full? Take a tea break.