Lesson 30 of 39 · Part L · Level 2 · Explained
Zone imports and export money: matching and retention
How a zone enterprise times its import LC payments so they fall due after its export money arrives, why the bank wants a backup source of foreign exchange, and how Type B and Type C enterprises may keep export proceeds in foreign currency for back-to-back payments, for 30 days, and for sister concerns in the zones.
In Lesson 29, Imports by enterprises in the specialized zones, Sabrina worked through the zone rules with Sadia, Rakib and Shely. Sabrina is the finance head of a shoe factory inside an export processing zone in Chattogram, a Type B joint venture. Her factory imports leather, soles and glue, and exports finished shoes. One lesson from that day stayed with her: her LCs for inputs must be paid out of the factory's own foreign exchange earnings, or its borrowings abroad credited to its FC accounts, and never out of the bank's own foreign exchange.
"So my shoes must earn the dollars before my leather bill asks for them," she says to Sadia, the senior import desk officer at her bank's AD branch. "But buyers don't always pay on the dot. Last Eid, one buyer paid three weeks late. I nearly lost my hair."
Rakib, the new officer on Sadia's team, looks up. "And when the dollars do arrive, does the bank change them all into Taka at once?"
Sadia smiles. "Two good questions, and they are both about timing. Today's guest reads cash flow like a weather map." The guest is Mithu, a chartered accountant and former CFO of a large export group. "Money is like a train," Mithu says. "It must reach the station before the passenger who is waiting for it. Part L tells you how to plan the timetable, and where the money may wait."
This lesson covers the rest of Part L: matching import payments with export proceeds (L-4) and keeping export proceeds to settle import bills (L-5).
Import payments matching with export proceeds
In plain words
L-4 is about timing and about having a backup plan. It has two sentences.
1. Match the dates. Import payments against LCs should be scheduled so that the payment obligations do not fall due before the export proceeds are received. In simple words: the leather bill should come due after the shoe money arrives, not before. The sentence doesn't name who does the scheduling; it states the goal for the payment dates.
Why does this matter so much in a zone? Remember Lesson 29: a zone enterprise pays for its imports from its own foreign exchange earnings or borrowings abroad, not from the bank's own foreign exchange. If the bill comes first, there is nothing in the pot.
2. A backup plan, checked by the bank. This applies in all cases where an AD opens an inputs import LC on account of an enterprise in a zone.
- The AD should satisfy itself that the enterprise has made the necessary arrangements.
- The arrangement is this: if export receipts fall short or come late, foreign exchange will be made available from external sources.
- The circular doesn't list what these external sources are, or what proof the AD should see. It only says the AD should be satisfied that the arrangement exists.
Mithu puts it like a family wedding: "You plan for the guests you invited. But a wise family also knows which uncle to call if the caterer's bill comes before the gift envelopes are opened."
At the desk
Sabrina asks Sadia to open an inputs import LC for leather, payable at sight. Her shoe buyer pays 60 days after shipment. Mithu points out that a sight payment would fall due long before the shoe money arrives, so Sadia suggests payment terms that fall due after the export proceeds are expected. Before opening the LC, Rakib also asks Sabrina how the factory would get foreign exchange from external sources if the buyer paid late or paid less, and notes her answer in the file.
Key words
- Proceeds
- The money received from a sale, here the payment for exported goods.
- Shortfall
- Getting less money than expected, or less than is needed to pay a bill.
- External sources
- Under L-4, sources of foreign exchange outside the expected export receipts, arranged in advance in case those receipts fall short or come late. L-4 does not list what they are.
Read the rule as written (Para L-4)
Import payments against LCs should be scheduled in a manner that payment obligations do not fall due before receipt of export proceeds. In all cases of opening inputs import LCs on accounts of enterprises in respective zones, ADs should satisfy themselves that necessary arrangements have been made by the enterprises that in case of shortfall or delay in export receipts, foreign exchange would be made available from external sources.
Source: Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part L, paragraph 4 (page 34). The original circular is the authority.
Retention of export proceeds for settlement of import liabilities
In plain words
L-5 answers Rakib's question: when the export dollars arrive, must they all turn into Taka at once? Not always. It has three parts.
(1) The back-to-back settlement pool, for Type B and Type C. ADs may allow Type B and Type C industrial enterprises to keep their repatriated export proceeds in a back to back settlement pool in foreign currency, in line with paragraph 1 of Part-J (you met Part J's pool in Lesson 27). L-5(1) names only Type B and Type C; it doesn't mention Type A. These enterprises may:
- (a) keep repatriated export proceeds in the pool until the back to back payments are made;
- (b) keep the value added portion in the same pool for up to 30 days, to settle import liabilities or other admissible payments in foreign currency;
- (c) transfer unutilized funds to other ADs, to settle import liability of the exporters or their subsidiaries/sister concerns operating in specialized zones.
(2) Money still unused after 30 days. If funds remain unused within 30 days, ADs may transfer them to the foreign currency accounts of the exporters concerned. But first, at least 20 percent of the total repatriation must be encashed (changed into Taka). For the garments sector, the figure is at least 25 percent. Note: the percentage is of the total amount brought home, not just of the unused part.
This reads differently from Lesson 27. There, J-1(3) says unused pool money is encashed in Taka compulsorily just after 30 days, and caps transfers to other ADs at the ERQ entitlement. L-5, written for zone enterprises, instead lets ADs move unused money to the foreign currency account after the 20 or 25 percent encashment, and L-5(1)(c) doesn't mention that ERQ cap. The two texts differ; this lesson follows L-5's words for zone enterprises.
(3) Exports that are not back-to-back. Exporters who export without a back to back basis may keep repatriated proceeds in foreign currency for 30 days, and use them in terms of paragraph 2 of Part-J. This includes transferring them to other ADs to meet import payments of the exporters' subsidiaries/sister concerns operating in specialized zones. Unused funds, if any, may be transferred to the exporters' foreign currency accounts, on encashment of at least 20 percent of total repatriation (25 percent for readymade garments exports).
Things the circular doesn't spell out here: the exact day the 30 days start counting, and whether L-5(3) is limited to Type B and Type C. Mithu sums it up: "The pool is a waiting room, not a home. After 30 days, leftovers pay a small Taka fare before moving on."
At the desk
Sabrina's Type B factory, one of the types L-5(1) covers, receives USD 200,000 from a shoe buyer under a back-to-back arrangement. Sadia keeps the proceeds in the back to back settlement pool and pays two leather bills from it as they fall due. After 30 days, USD 60,000 is still unused. Because shoes are not garments, at least 20 percent of the total repatriation, USD 40,000, must be encashed before the AD may move the unused funds to the factory's foreign currency account. Rakib checks the encashment figure against the total of USD 200,000, not against the USD 60,000.
Key words
- Back to back settlement pool
- Under L-5(1), a foreign currency pool in which an AD may let a Type B or Type C zone enterprise keep its repatriated export proceeds to make back-to-back payments, in line with paragraph 1 of Part-J.
- Value added portion
- The part of the export proceeds that is left after the cost of the imported inputs, in other words the value the exporter added.
- Encashment
- Converting foreign currency received into Taka.
- Sister concern
- A separate company that belongs to the same owners or business group.
Read the rule as written (Para L-5)
(1) ADs may allow Type B and Type C industrial enterprises to retain their repatriated export proceeds in back to back settlement pool in foreign currency in line with the provisions as per paragraph 1 of Part-J. Accordingly, Type B and C industrial enterprises may:
(a) retain repatriated export proceeds in the settlement pool until back to back payments.
(b) retain the value added portion in the same pool for up to 30 days for settlement of import liabilities or other admissible payments in foreign currency.
(c) transfer unutilized funds to other ADs for settlement of import liability of exporters or their subsidiaries/sister concerns operating in specialized zones.
(2) In case of fund remaining unused within 30 days, ADs may transfer the same, after encashment of at least 20 percent (25 percent for garments sector) of total repatriation, to foreign currency accounts of respective exporters.
(3) Exporters executing export without back to back basis may retain repatriated export proceeds in foreign currency for 30 days and utilize the same in terms of paragraph 2 of Part-J, including transfer to other ADs to meet import payments of exporters’ subsidiaries/sister concerns operating in specialized zones. Unused fund, if any, may be transferred to foreign currency accounts of respective exporters, on encashment of at least 20 percent (25 percent for readymade garments exports) of total repatriation.
Source: Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part L, paragraph 5 (page 35). The original circular is the authority.
Putting it together
So far: a zone enterprise's import payments against LCs should be scheduled so they do not fall due before its export proceeds arrive, and for every inputs import LC the AD should be satisfied that the enterprise has arranged foreign exchange from external sources in case export receipts fall short or come late. ADs may let Type B and Type C enterprises keep repatriated export proceeds in a back to back settlement pool until the back-to-back payments, keep the value added portion there for up to 30 days, and transfer unutilized funds to other ADs for zone sister concerns. Money unused within 30 days may go to the exporter's foreign currency account after at least 20 percent (25 percent for garments) of the total repatriation is encashed, and exporters who don't export on a back-to-back basis may keep proceeds for 30 days under paragraph 2 of Part-J, on the same encashment terms for unused funds.
Next: Part L of the import room is complete. Part M, the framework for import trade into Free Trade Zones, starts in Lesson 31, Importing into Free Trade Zones.