Lesson 11 of 42 · Part B · Level 2 · Explained
Money, discounting and selling to the zones
How NFCD money can pay zone suppliers early, the 50% ceiling, why a sale from a local mill to a zone factory counts as an export, and the special EZ rule for Taka sales.
In Lesson 10, Zones and who's who, Eliana learned the zone vocabulary: four kinds of zones, three types of factory, and one big idea. The gate is different, but the export rules still follow the goods.
Now the questions get practical, and they are all about money. On Monday morning, Arman walks into her branch. He owns a spinning mill in Narayanganj, and he has just won a big order for yarn from a factory inside an EPZ. "The buyer will pay me in US dollars," he says, beaming. Then he frowns. "My accountant says I need an EXP form. But the factory is in Bangladesh! My yarn is not even crossing a border. Am I an exporter now?"
Eliana smiles. She has read the next part of the circular. Yes, Arman, today you are an exporter. This lesson explains why, and it also shows how a bank can use a special pool of foreign currency to pay zone suppliers early.
Discounting of accepted usance bills of specialized zones' enterprises (Type A and B)
In plain words
This paragraph is about money held in NFCD accounts (Non-Resident Foreign Currency Deposit accounts) at a bank, and one useful job that money may do.
First, picture the deal:
- A Type A or Type B zone factory supplies raw materials, such as fabric, under a back-to-back arrangement.
- The zone factory draws a usance bill: a bill to be paid on a later date, not today.
- A bank (AD) operating outside the specialized zones accepts that bill.
The zone factory would rather have its money now than wait for the due date. Here is what the rule allows:
- Balances in NFCD accounts may be used to discount these accepted usance bills, so the zone supplier is paid early.
- There is a ceiling. NFCD money used for this purpose, together with payments for back-to-back sight LCs "as instructed", must not exceed 50% of the total NFCD balance of the AD concerned.
So both uses share one bucket. If an AD's total NFCD balance is USD 10 million, at most USD 5 million can go to these two uses together.
Two things this paragraph does not spell out: it names only Type A and Type B enterprises and says nothing about Type C bills, and it doesn't describe here the instructions it refers to for back-to-back sight LCs.
At the desk
Eliana's branch has accepted a usance bill drawn by a Type B zone factory that supplied fabric to a garment exporter in Gazipur under a back-to-back arrangement. The zone factory asks to be paid now. Eliana checks with treasury: the bank's total NFCD balance is USD 8 million, and USD 3.5 million is already used for this kind of discounting and for back-to-back sight LC payments. The ceiling is USD 4 million, so a USD 400,000 bill fits, but a USD 600,000 bill would push the total past the limit.
Key words
- NFCD account
- Non-Resident Foreign Currency Deposit account: a foreign currency deposit account kept with an AD. Under B-4, part of an AD's NFCD balances may be used to discount certain zone bills.
- Usance
- A credit period: the buyer pays a set number of days later, for example 90 days from sight or from the shipment date.
- Discounting
- Paying the exporter now, minus a cost, for a bill that the buyer will pay later.
- Back-to-back LC
- An import LC opened on the strength of an export LC, common in garments.
Read the rule as written (Para B-4)
Balances in Non-Resident Foreign Currency Deposit (NFCD) accounts may be utilized for discounting usance bills drawn by Type A and Type B enterprise of specialized zones for supplying raw materials under back to back arrangement and accepted by ADs operating outside specialized zones. However, utilization of NFCD fund for the above purpose including payment for back to back sight LCs as instructed will not exceed 50% of total NFCD balance of the concerned AD.
Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part B, paragraph 4 (page 18). The original circular is the authority.
Sale of Bangladeshi goods to enterprises in specialized zones
In plain words
This long paragraph answers Arman's question, and then looks at the same deal from the zone factory's side.
1. Selling into a zone can be an export. When Bangladeshi goods or raw materials are sold to an enterprise in a specialized zone against payment in foreign currency, the sale is treated as an export from Bangladesh. So the normal export rules apply:
- the export is declared on an EXP form, and
- the proceeds must be repatriated (brought home through the bank).
2. The zone factory's side: it is an import. For the zone enterprise buying the goods, the same deal counts as an import. Its AD may report it to Bangladesh Bank in the monthly schedule E-2, under Statement-10 or Statement-11 (as the case may be), quoting the number of the EXP form(s) that the foreign currency payment relates to. The circular doesn't say here which statement fits which case.
- The same "quote the EXP number" method also applies to transactions between EPZ enterprises and intra-EPZ enterprises.
- It applies to reporting in the online web portal.
- But when an EPZ enterprise imports from abroad, the usual IMP form reporting applies.
3. A special case: Taka sales from an EZ's Domestic Processing Area. The National Board of Revenue, by order no. 288/2017/Customs/529 dated December 21, 2017, amended the Customs (Economic Zones) Procedures, 2017. It waived EXP/IMP formalities for trade between enterprises in the Domestic Processing Area (DPA) of economic zones and the Tariff Area (TA) of Bangladesh. As a result:
- the EXP form is not needed when such EZ enterprises sell goods in Taka to the Tariff Area;
- DPA enterprises in EZs, whatever their ownership type, may settle their liabilities for imports and other permissible expenses from their Taka accounts.
In short: foreign currency sale into a zone means EXP form and money home; a Taka sale from an EZ's DPA to the Tariff Area means no EXP form.
At the desk
Arman's mill sells yarn worth USD 80,000 to the EPZ factory, payable in US dollars. Eliana issues an EXP form for the sale and tells Arman that the dollars must come in through the bank, like any export. A week later, the EPZ factory's bank calls: it is preparing its monthly E-2 schedule and asks for the EXP number, so it can quote it against the factory's payment. Eliana sends it over, and both sides of the deal now point to the same form.
Key words
- EXP form
- The export declaration form. Every export, unless exempt, must have one.
- IMP form
- The import payment declaration form (Appendix-1). Every import payment needs one.
- Domestic Processing Area (DPA)
- The part of an economic zone named in B-5 whose enterprises may sell to the Tariff Area in Taka without EXP/IMP formalities.
- Tariff Area (TA)
- The ordinary part of Bangladesh outside the zones, where the usual customs rules apply.
Read the rule as written (Para B-5)
Sales of Bangladeshi goods or raw materials to the enterprises in specialized zones against payment in foreign currency shall be treated as exports from Bangladesh and normal foreign exchange regulations concerning declaration of exports on EXP Forms and repatriation of proceeds is applicable to these exports to zones' enterprises.
Exports to specialized zone areas shall be considered as imports by respective enterprises. In such cases, ADs of zone enterprises may report such import transactions to Bangladesh Bank in monthly schedule E-2 under Statement-10 or Statement-11 (as the case may be) mentioning the number of concerned EXP Forms to which the payment in foreign currency relate. This procedure of mentioning EXP numbers will also be applicable for transactions between EPZ enterprises and intra EPZ enterprises. The above procedure will be applicable for reporting in online web portal. Usual IMP Form reporting procedures will, however, be applicable for imports by EPZ enterprises from abroad.
National Board of Revenue (NBR) vide its order no. 288/2017/Customs/529 dated December 21, 2017 effects relevant amendment in the Customs (Economic Zones) Procedures, 2017 to waive export/import formalities (EXP/IMP) for transactions between enterprises operating in Domestic Processing Area (DPA) of EZs and in Tariff Area (TA) of Bangladesh. Accordingly, EXP Form procedure will not be applicable for such EZ enterprises to sell goods in Taka to TA. Hence, transactions by DPA enterprises in EZs irrespective of their ownership status are allowed to settle their liabilities for imports and other permissible expenses out of the fund held in their Taka accounts.
Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part B, paragraph 5 (page 18). The original circular is the authority.
Putting it together
So far: an AD may use its NFCD balances to discount accepted usance bills of Type A and Type B zone suppliers under back-to-back arrangements, but this use, together with back-to-back sight LC payments, must stay within 50% of its total NFCD balance. A sale of Bangladeshi goods to a zone enterprise against foreign currency is an export (EXP form and money home) and, for the zone factory, an import reported with the EXP number. Taka sales from an EZ's Domestic Processing Area to the Tariff Area need no EXP form, and DPA enterprises may pay from their Taka accounts.
That completes Part B of the export room: exports from the specialized zones.
Next: Part C of the export room, on safeguards, starts in Lesson 12, Safeguards: clean money and careful banking.