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Lesson 39 of 42 · Part O · Level 2 · Explained

Using ERQ money: currencies, payments, deposits and cards

Which currencies an ERQ account may hold, what exporters may pay from it without asking Bangladesh Bank, moving ERQ money between banks and to sister concerns, term deposits, advance payments for imports up to USD 50,000, small service payments when the account is short, and international cards.

O-2O-3

In Lesson 38, The ERQ account: how much exporters may keep, Evelyn learned that she may keep 15% of the FOB value of her woven-shirt export in foreign currency. Now USD 15,000 sits in her ERQ account, and she has plans for every dollar.

"A trade fair in Europe next spring," she tells Eliana, counting on her fingers. "Spare parts for my sewing machines. A deposit for a new embroidery machine. And my sister concern, the packaging company, has an import bill to pay. Can the ERQ money do all of that? Or must I write to Bangladesh Bank each time?"

Nabila is waiting behind her with her own list: server fees, a domain renewal and a software registration abroad.

Eliana smiles and calls the branch's guest for the week: Mithu, a chartered accountant and former CFO of a large export group. Mithu ran ERQ accounts for years. "An ERQ account is like a purse for business travel," she says. "For many things you may spend it without asking Bangladesh Bank, but only on the right things. Let's see what the right things are."

This lesson covers O-2 and O-3, the rest of Part O: which currencies, what the money may be used for, deposits, advance payments, small service payments and cards.

Para O-2

Eligible currency and utilization

In plain words

O-2 is the user guide for the ERQ account. It has five parts.

(1) Which currencies. Once the export proceeds are realized, the retained foreign exchange may be kept in foreign currency accounts with the concerned ADs in US Dollar, Pound Sterling, Euro, Japanese Yen or Chinese Yuan.

(2) What the money may be used for. Exporters may use the balances for bona fide business purposes, without prior approval of Bangladesh Bank, such as:

  • business visits abroad;
  • taking part in export fairs and seminars;
  • setting up and running offices abroad;
  • importing raw materials, machinery and spares;
  • repaying an authorized foreign loan; and so on ("etc.").

For IT/software firms, ADs may, on request, remit from the ERQ account, also without prior approval: international alliance or software registration fees, domain registration and hosting fees, server maintenance fees, account verification or remittance test fees, etc.

Investment abroad is different: it needs prior approval under the Capital Account Transaction (Overseas Equity Investment) Rules, 2022.

Moving money between banks. An exporter with ERQ accounts at different ADs may transfer unencumbered foreign currency between them, for the bona fide purposes above.

Sister concerns. ERQ funds may also settle import bills and repay authorized foreign loans of the exporter's subsidiaries or sister concerns. When the ERQ money sits at another AD, it may be used for (i) the exporter's own import bills and (ii) the import bills and authorized foreign loan repayments of its subsidiaries or sister concerns, with two sets of duties:

  • (a) The sending AD must be satisfied that the money will be used only for imports and foreign loan repayments of the exporter or its subsidiaries or sister concerns, and that it is unencumbered. The transfer goes through the BD-RTGS System, through Bangladesh Bank clearing accounts of ADs. This step doesn't apply when the money moves within the same AD.
  • (b) The receiving AD keeps the money in a margin account until the import payment or loan repayment is made. It pays imports following the Import Policy Order, foreign exchange regulations and other import instructions. For loan repayments, it follows the instructions on borrowing abroad by residents and the loan approval letter of the competent authority.

(3) Term deposits. ERQ money may also be kept as interest-bearing, renewable term deposits with the concerned ADs in Bangladesh, in the same five currencies, with a minimum balance of USD 2,000 or its equivalent. The period follows normal banking practice, and interest may be paid at rates comparable to the prevailing euro deposit rates for that currency.

(4) Advance payment for imports. ADs may pay in advance from the ERQ account up to USD 50,000 or its equivalent, for bona fide business purposes, if the contract or proforma invoice provides for advance payment, and:

  • (a) the AD is satisfied that a repayment guarantee can't be obtained from the supplier;
  • (b) the IPO is followed carefully;
  • (c) the AD, at its own responsibility, arranges for the money to come back if the goods don't enter Bangladesh within the stipulated time;
  • (d) when opening a back-to-back LC, the AD should adjust for the advance so the IPO's value addition requirement is not breached;
  • (e) the importer signs the Form of Undertaking (Appendix-15) before the money goes.

(5) When the ERQ account is short. ADs may let exporters remit up to USD 5,000 or its equivalent for bona fide service payments to a beneficiary's bank account abroad, even without ERQ balances, if:

  • (a) adequate funds are not available in the ERQ account;
  • (b) the request comes with invoices giving the details of the services, and applicable taxes are deducted and paid;
  • (c) the amount is adjusted later from export proceeds: it is deducted from the amount the exporter could retain in the ERQ or margin account, and that amount is encashed into the exporter's Taka account.

O-2(5) itself says "up to USD 5,000" without a time period. Part J (J-2, Lesson 28) refers to this facility as "USD 5,000 per annum under paragraph 2(5), Part-O". The two paragraphs are worded differently; the circular is the final word.

At the desk

Evelyn's ERQ account holds USD 15,000. Eliana works through her list with Mithu. The trade fair visit and the sewing-machine spares are bona fide business uses, so no prior approval from Bangladesh Bank is needed. The advance on the embroidery machine (USD 9,000, pretend figures) follows O-2(4): the proforma invoice provides for advance payment, the supplier can't give a repayment guarantee, the IPO is followed, and Evelyn signs the Form of Undertaking (Appendix-15) first. Eliana also notes that if the machine doesn't arrive within the stipulated time, the bank itself must arrange for the advance to come back. The packaging sister concern banks with another AD, so Eliana's branch checks the money is unencumbered and only for that import, and sends it by BD-RTGS; the other AD keeps it in a margin account until the import bill is paid. Then Nabila: her server, hosting and software registration fees can be remitted from her ERQ account on request, also without prior approval. Mithu closes her notebook. "Spend on business, follow the conditions, and the purse stays healthy."

Key words
Bona fide
Genuine; made in good faith.
Unencumbered fund
Money in an account that is not already tied to, or set aside for, a payment.
Sister concern
A separate company that belongs to the same owners or business group.
Term deposit
Money placed with a bank for a fixed period, earning interest. It can be renewed when the period ends.
Euro deposit rate
The interest rate paid in the international money market on deposits of a currency held outside its home country, for example US dollars held in banks outside the USA. Under O-2(3), interest on ERQ term deposits may be comparable to it.
Import Policy Order (IPO)
The government's rule book on what may be imported and on what conditions. Issued by the Ministry of Commerce for a few years at a time.
Form of Undertaking (Appendix-15)
The form the importer signs before an AD makes an advance payment for an import from an ERQ account under O-2(4).
Read the rule as written (Para O-2)

(1) Eligible currency: Foreign exchange out of the retention quota may be maintained in foreign currency accounts with the concerned ADs in US Dollar, Pound Sterling, Euro, Japanese Yen, or Chinese Yuan upon realization of the export proceeds.

(2) Utilization: Balances in these accounts may be used by the exporters for bonafide business purposes, such as business visits abroad, participation in export fairs and seminars, establishment, and maintenance of offices abroad, import of raw materials, machinery, and spares, repayment of authorized foreign loan, etc. without prior approval of Bangladesh Bank. In addition, ADs on request by the IT/Software exporting firms can remit international alliance/software registration fees, domain registration/hosting fees, server maintenance fees, account verification/remittance test fees, etc. from the ERQ account of the applicant without prior approval of Bangladesh Bank. Foreign exchange from the ERQ account can be used by the exporter for investment abroad with prior approval as per Capital Account Transaction (Overseas Equity Investment) Rules, 2022. Transfer of unencumbered foreign currency between the ERQ accounts of the same exporter maintained out of export receipts with different ADs is permissible for bonafide transactions as mentioned above. Besides, funds from the ERQ accounts of the exporters may be used for settlement of import liability and repayment of authorized foreign loans of their subsidiaries/sister concerns. However, funds from ERQ accounts of the exporters held at other ADs may be used for (i) settlement of import liability of the exporters and (ii) settlement of import liability & repayment of authorized foreign loan of exporters' subsidiaries/sister concerns under compliance with the following instructions:

(a) Fund transferring AD: ADs shall be satisfied that the fund will be used only for imports and repayment of foreign loans of the exporters or their subsidiaries/sister concerns by other ADs and the fund is unencumbered. Transfer will be executed by BD-RTGS System through Bangladesh Bank clearing accounts of ADs. This instruction shall not be applicable for fund transfers and receipts in the same AD.

(b) Fund receiving AD: ADs shall retain the fund in the margin account till the settlement of import payments and repayment of foreign loans. ADs shall settle the import payments in compliance with the Import Policy Order in force, foreign exchange regulations, and other import related instructions. For repayment of foreign loans, concerned instructions mentioned about borrowing abroad by residents and the loan approval letter of the competent authority shall have to be followed.

(3) Term deposit and interest thereon: Foreign exchange out of ERQ account may also be kept as interest bearing renewable term deposits with the concerned ADs in Bangladesh in US Dollar, Pound Sterling, Euro, Japanese Yen, or Chinese Yuan with minimum balances of USD 2,000 (Two thousand) or its equivalent. Periods of such term deposits may be determined in accordance with normal banking practices/normal banking considerations. Interest on such deposits may be allowed at rates comparable to the prevailing euro deposit rates for the relevant currency.

(4) Advance payment against import using ERQ accounts: ADs may effect advance payment not exceeding USD 50,000 (Fifty thousand) or its equivalent from the ERQ account against bonafide business purposes provided the relevant contract/proforma invoice stipulates for such payment subject to the following terms and conditions:

(a) The ADs shall have to be satisfied that repayment guarantee is not obtainable from the supplier against the remittance to be made in advance; and

(b) IPO in force shall have to be meticulously followed;

(c) The ADs shall, at their own responsibility, have to arrange for repatriation of the remittance made in advance in case the entry of goods into the country is not effected within the stipulated time;

(d) While opening back to back LC, the ADs should adjust the value of advance payment to ensure that the value addition requirement as stipulated in the IPO is not breached; and

(e) Before effecting the advance payment, the ADs must obtain Form of Undertaking (Appendix-15) duly signed by the importer.

(5) Outward remittance without balances held in ERQ accounts: ADs may allow remittance facilities to exporters for bonafide service payments to beneficiary's bank account abroad up to USD 5,000 or equivalent, subject to observance of the following instructions:

(a) The facility will be useable provided that adequate funds are not available in ERQ account;

(b) Requests from the exporter are supported by invoices specifying details of services and deduction & payment of applicable taxes thereon; and

(c) The foreign exchange so remitted under this facility shall be adjusted with subsequent export proceeds by deduction from retainable amount in ERQ/margin account and encashment the same in Taka account of the exporter.

Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part O, paragraph 2 (page 53). The original circular is the authority.

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Para O-3

International card

In plain words

O-3 is one short sentence with a pointer. ADs may issue international cards to exporters against the balances in their:

  • Exporters' Retention Quota (ERQ) accounts; and
  • Agents' Retention Quota (ARQ) accounts.

How the cards are issued and used is not in Part O. O-3 points to FE Circular No. 37, dated September 30, 2025, and the circulars after it. So this lesson doesn't go into the card rules.

O-3 names the ARQ account without defining it. The name suggests the agents' retention from O-1(5), but O-3 doesn't spell that out.

Mithu's picture: "The ERQ account is the purse. The card is a smaller purse you can carry in your pocket on a business trip, filled from the big one."

At the desk

Evelyn will fly to the trade fair next spring and asks whether she must carry dollar notes. Eliana explains that under O-3 the bank may issue her an international card against her ERQ balance, and that the issuing and use rules are set out in FE Circular No. 37 of 30 September 2025 and later circulars, which the card team will follow.

Key words
International card
A payment card that can be used abroad. Under O-3, ADs may issue one to an exporter against the balance in its ERQ or ARQ account.
ARQ
Agents' Retention Quota. O-3 names ARQ accounts, alongside ERQ accounts, as accounts against which international cards may be issued.
Read the rule as written (Para O-3)

International cards may be issued to the exporters against balances held in Exporters' Retention Quota (ERQ) and Agents' Retention Quota (ARQ) accounts. The arrangements for issuance of international cards and use thereof by exporters are described in FE Circular No. 37, dated September 30, 2025 and subsequent circulars.

Source: Bangladesh Bank, FEPD-1 Circular No. 26, 30 July 2026, Part O, paragraph 3 (page 55). The original circular is the authority.

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Putting it together

So far: ERQ money may be kept in US Dollar, Pound Sterling, Euro, Japanese Yen or Chinese Yuan with the concerned ADs, and spent without Bangladesh Bank's prior approval on bona fide business purposes such as business visits, export fairs, offices abroad, imports of raw materials, machinery and spares, and authorized foreign loan repayments; IT/software firms may also pay registration, domain, hosting and server fees from it. Investment abroad needs prior approval under the 2022 Overseas Equity Investment Rules. Unencumbered ERQ money may move between the same exporter's ADs, and may settle imports and authorized foreign loans of its subsidiaries or sister concerns, through BD-RTGS and a margin account when another AD is involved. ERQ money may sit in renewable term deposits of at least USD 2,000, pay import advances of up to USD 50,000 under five conditions, and back an international card; if the account is short, up to USD 5,000 may be remitted for bona fide services and adjusted from later export proceeds.

Next: Lesson 40, Foreign currency accounts for zone enterprises, opens Part P: how much of their export money zone enterprises may keep in foreign currency.

Check yourself

31 questions, in 4 sets of up to 10. Nobody sees your answers but you.

Set 1 of 4

1. Under O-2(1), in which currencies may ERQ money be kept?
2. Under O-2(1), when may the retained foreign exchange be kept in these foreign currency accounts?
3. True or false: Chinese Yuan is one of the currencies O-2(1) allows for ERQ accounts.
4. Which of these may an exporter pay from its ERQ account without Bangladesh Bank's prior approval under O-2(2)?
5. Which of these does O-2(2) list as a use of ERQ money without prior approval?
6. True or false: under O-2(2), ERQ money may be used to repay an authorized foreign loan without prior approval of Bangladesh Bank.
7. What does O-2(2) say about using ERQ money for investment abroad?
8. Desk case: Nabila asks her AD to pay her server maintenance and domain hosting fees abroad from her ERQ account. What does O-2(2) say?
9. Which of these fees does O-2(2) name for IT/software exporting firms?
10. Under O-2(2), what kind of foreign currency may move between ERQ accounts of the same exporter at different ADs?

Set 2 of 4

11. True or false: O-2(2) allows ERQ funds to settle import liabilities and repay authorized foreign loans of the exporter's subsidiaries or sister concerns.
12. When ERQ funds at one AD go to another AD for an import bill, what must the sending AD be satisfied about under O-2(2)(a)?
13. Through which system does O-2(2)(a) say such a transfer between ADs is made?
14. True or false: the sending-AD instruction in O-2(2)(a) applies even when the money moves within the same AD.
15. Under O-2(2)(b), where must the receiving AD keep the transferred ERQ money?
16. Desk case: Evelyn's packaging sister concern banks with another AD and has an import bill to pay from Evelyn's ERQ money. What must that other AD follow when it pays the import bill?
17. For a foreign loan repayment funded by ERQ money from another AD, what must the receiving AD follow under O-2(2)(b)?
18. What is the minimum balance for an ERQ term deposit under O-2(3)?
19. Under O-2(3), at what rate may interest on ERQ term deposits be allowed?
20. True or false: O-2(3) fixes the period of ERQ term deposits at exactly one year.

Set 3 of 4

21. What is the most an AD may pay in advance from an ERQ account against an import under O-2(4)?
22. Which document must provide for the advance payment under O-2(4)?
23. Under O-2(4)(a), what must the AD be satisfied about before an advance payment?
24. Under O-2(4)(c), who arranges for the advance to come back if the goods don't enter Bangladesh within the stipulated time?
25. Desk case: Evelyn wants to pay a USD 9,000 advance from her ERQ account for an embroidery machine (pretend figures). The proforma invoice provides for it and the supplier can't give a repayment guarantee. What must Eliana get from Evelyn before the money goes?
26. Under O-2(4)(d), what should the AD do when opening a back-to-back LC after an advance payment from ERQ?
27. Under O-2(5), how much may ADs let an exporter remit for bona fide service payments when the ERQ account lacks adequate funds?
28. Which of these is a condition for the O-2(5) facility?
29. Under O-2(5)(c), how is money remitted under this facility settled later?
30. Under O-3, against which accounts may ADs issue international cards to exporters?

Set 4 of 4

31. Where does O-3 say the arrangements for issuing and using these international cards are described?
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