For goods imported under foreign commodity loans, credits and grants, how quickly Taka counterpart funds must reach Bangladesh Bank: three working days for clean documents, five days for discrepant ones, seven days for the agency to pay when goods come without an LC, and the 24-hour rules between the designated bank and the importer's bank.
In Lesson 37, Visitors' digital wallets, travellers' jewellery and gold for jewellery exports, Lukas turned the money in his phone into Taka, Rakib's mother brought home her bangles, and Rumi learned how gold comes in for jewellery that goes out. That closed Part O.
Now we reach Part P, the last Part of the import circular. It looks different from everything before it. Here the goods come under foreign commodity loans, credits and grants, for goods such as fertiliser in our story. When the documents arrive, Taka must be paid into a Government account at Bangladesh Bank. The circular calls this the counterpart fund.
On Monday morning Nasir, a procurement officer at a government agency, walks into Sadia's branch. His agency imports fertiliser under a foreign commodity credit, and the branch is the designated bank for that credit. "Three sets of documents have arrived," he says, a little out of breath. "One is clean, one has a mistake in it, and one came with no LC at all. My director wants to know how many days we have for each."
Rakib starts counting on a calendar. Sadia stops him. "Before you count, call Shirin." Shirin has spent 35 years in banking and once headed trade and foreign exchange at a large bank. "Government money runs on a strict clock," she says. "Miss the clock, and interest starts running. Let's take Nasir's three sets one by one."
This lesson covers P-1 to P-3: the deadlines for depositing counterpart funds.
P-1 is the main rule, for clean documents, that is, documents with no discrepancy.
The designated bank in Bangladesh deposits the funds against all clean documents into Government Account No. IV A, or any other Government account prescribed for that loan, credit or aid, kept with Bangladesh Bank.
The deadline is three working days from the date the documents are received.
The three days include both the date of receipt and the date of deposit.
The exception: discrepant documents that arrive on a collection basis, or that the foreign bank negotiated under reserve, follow P-2 instead.
A pretend calendar: documents arrive on Sunday. If Sunday, Monday and Tuesday are all working days, Sunday is day 1, Monday day 2 and Tuesday day 3. The money must reach Bangladesh Bank by Tuesday, not Wednesday.
The circular doesn't define "counterpart fund"; in this lesson it simply means the Taka that P-1 to P-3 ask the bank to deposit into the Government account.
At the desk
Nasir's first set of fertiliser documents arrives on Sunday and is clean. Rakib writes "deposit by Wednesday" in his diary. Shirin corrects him gently: the three working days include the day of receipt, so if Sunday to Tuesday are all working days, the funds must reach Government Account No. IV A at Bangladesh Bank by Tuesday.
Key words
Counterpart fund
Under Part P, the Taka a designated bank deposits into a Government account at Bangladesh Bank for goods imported under foreign commodity loans, credits or grants.
Designated bank (loans, credits and grants)
Under Part P, the bank in Bangladesh that handles imports under a particular foreign loan, credit or grant: it opens the LCs or receives the documents, and deposits the counterpart funds with Bangladesh Bank. The circular doesn't define the term further.
Clean documents
Documents that match the LC terms, with no discrepancy.
Negotiated under reserve
Paid by a bank abroad to the exporter against documents with a discrepancy, while keeping the right to take the money back from the exporter if the documents are refused.
Read the rule as written (Para P-1)
Funds against all clean documents except in cases of discrepant documents received on collection basis or negotiated by the foreign banks under reserve shall be deposited by the designated bank in Bangladesh to Govt. Account No. IV A (or such other account of the Govt. of Bangladesh as prescribed in respect of the relative loan/credit/aid) maintained with Bangladesh Bank within three working days from the date of receipt of documents; the said period shall be deemed to be inclusive of the date of receipt of documents and the date of deposit of counterpart funds to Bangladesh Bank.
Source: Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part P, paragraph 1 (page 44). The original circular is the authority.
P-2 covers discrepant documents. Because of a discrepancy, the negotiating bank abroad may send the documents on a collection basis, under reserve, or otherwise. Then the bank should:
forthwith (straight away) arrange for the importer to accept the documents; and
deposit the counterpart funds within 5 days from the date the documents are received.
If the importer does not accept the documents, the bank should either return them to the negotiating bank, or deal with them as the negotiating bank instructs.
Notice the different words: P-1 says "three working days", while P-2 says "5 (five) days". The circular doesn't say whether these five days are working days or calendar days.
At the desk
Nasir's second set has a discrepancy: the invoice spells the fertiliser grade differently from the LC, so the bank abroad sent it on a collection basis. Rakib asks Nasir's agency at once whether it accepts the documents, and notes that the counterpart funds are due within 5 days of receipt. "And if they say no?" Rakib asks. Shirin replies, "Then the documents go back to the negotiating bank, or we follow its instructions. We don't keep them in a drawer."
Key words
Discrepancy
A difference between the documents and the LC terms, or between the documents themselves. It can delay or stop payment.
Documentary collection
The seller's bank sends the shipping documents to the buyer's bank, which hands them over only when the buyer pays or accepts a bill. No bank promise to pay.
Negotiation
The bank pays or gives value to the exporter against documents before the foreign bank pays.
Read the rule as written (Para P-2)
Documents against LC received on collection basis/negotiated under reserve due to discrepancy
In cases where due to discrepancy, the negotiating bank abroad sends the documents on collection basis or under reserve or otherwise the bank should forthwith arrange acceptance of the documents by the importers and deposit counterpart funds within 5(five) days from the date of receipt of the documents. In case of non- acceptance, the bank should return the documents to the negotiating bank or dispose of the documents in accordance with the instructions of the negotiating bank abroad.
Source: Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part P, paragraph 2 (page 44). The original circular is the authority.
Documents received direct by the ERD or designated banks without opening of LC
In plain words
P-3 starts with goods that come without an LC.
No LC. Under some loans, credits and grants, the utilizing agencies don't open LCs. Instead, the loan-giving agencies, or agencies they nominate, buy and ship the goods themselves. After shipment, the documents are mailed either to the Economic Relations Division (ERD) of the Ministry of Finance or to the designated bank, so the documents can be retired and the goods cleared from Customs.
On receiving the documents, the bank should forthwith arrange with the agency to pay the bill proceeds within 7 days, for deposit to Bangladesh Bank.
The agency should be warned that it will have to pay interest at a penal rate if the deposit is late beyond those 7 days.
Cases of default should be reported to Bangladesh Bank promptly.
LCs opened through the importer's bank. P-3 then sets four rules for an LC that the designated bank opens on an application that came through the importer's own bank:
(a) The importer's bank must retire the documents within 24 hours of receiving them from the designated bank. If it doesn't pay in time, the designated bank may recover from the importer's bank any penal interest it has to pay Bangladesh Bank.
(b) If the documents don't match the LC, the importer's bank should, within 5 days of receipt, either retire them or send them back to the designated bank. If it delays, it loses the right to object on the ground of discrepancies.
(c) In all these cases, the designated bank must send the documents to the importer's bank within 24 hours of receipt. If the delay is at the designated bank's end, it bears the penal interest for that period of delay itself.
(d) The designated bank deposits the Taka funds to Bangladesh Bank within the time limits above. If there is any delay, it is solely the designated bank's responsibility to deposit the Taka funds at the earliest, with interest at the prescribed rate.
A small puzzle in the layout: (a) to (d) sit under P-3's heading about documents received without an LC, but they talk about LCs opened by designated banks. The circular doesn't explain the placement; this lesson simply follows the text.
Shirin's picture: "It is a relay race. Each bank has a short leg to run with the baton, and whoever drops it pays for the lost time."
At the desk
Nasir's third set came with no LC: the lender's nominated agency shipped the fertiliser and mailed the documents to the branch. Rakib asks Nasir's agency to pay the bill proceeds within 7 days for deposit to Bangladesh Bank, and warns, as P-3 asks, that penal interest applies if it is late. Later that week, documents arrive under an LC that Sadia's branch opened on the application of a private importer's bank. Sadia sends them to that bank the same day, well inside the 24 hours, and reminds it that it must retire them within 24 hours of receipt.
Key words
ERD
Economic Relations Division of the Ministry of Finance. Under P-3, some import documents under foreign loans, credits and grants are mailed to it.
Retire a bill
Pay off an import bill and take the documents.
Penal interest
Extra interest charged as a penalty for being late with a payment or deposit.
Utilizing agency
The agency in Bangladesh that receives and uses the goods bought under a foreign loan, credit or grant.
Read the rule as written (Para P-3)
Under some loans, credits and grants, LCs are not opened by the utilizing agencies; instead goods are procured and shipped by the loan giving agencies themselves or by their nominated agencies. After shipment of such goods the documents are mailed either to the Economic Relations Division (ERD) of the Ministry of Finance or to the designated banks, as the case may be, for retirement of documents and clearance of consignment from the Customs Authority. On receipt of these documents, the bank should forthwith arrange with the relevant agency to pay the proceeds of the bills within a period of 7(seven) days for deposit to Bangladesh Bank. The agency should be warned that it would be required to pay interest at penal rate in the event of delay in the deposit of the funds within the stipulated period of 7(seven) days; cases of default should be brought to the notice of Bangladesh Bank promptly.
(a) Documents against LCs opened by designated banks on application through the banks of the importers: In case of LC opened by the designated bank against application through the importer's bank, the latter must retire the documents not later than 24(twenty-four) hours from the time of receipt thereof from the designated bank. If payment is not made within this time limit, the designated bank will be entitled to recover from the importer's bank any penal interest the former may have to pay to Bangladesh Bank.
(b) In case, however, the documents are not found in accordance with the terms of the LC, the importer's bank should within 5(five) days from the date of receipt, either retire the documents or send back the same to the designated bank. Any delay on this score will forfeit their right to raise objection on the ground of discrepancies.
(c) In all the above cases, the designated bank must send the documents to the importer's bank within 24(twenty-four) hours of receipt. For any delay at the designated bank's end, the penal interest relating to the period of delay made by them will have to be borne by them.
(d) The designated bank will deposit Taka funds to Bangladesh Bank within the time limit as in the foregoing paragraphs. In all cases of delay, it will be the responsibility solely of the designated bank to deposit the Taka funds to Bangladesh Bank at the earliest along with interest at prescribed rate.
Source: Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part P, paragraph 3 (page 44). The original circular is the authority.
So far: for imports under foreign commodity loans, credits and grants, the designated bank deposits Taka counterpart funds against clean documents into Government Account No. IV A (or another prescribed Government account) at Bangladesh Bank within three working days, counting both the day of receipt and the day of deposit. For discrepant documents received on collection basis or under reserve, the bank arranges acceptance at once and deposits within 5 days, or returns or disposes of the documents as the negotiating bank instructs. Where goods come without an LC, the agency should pay within 7 days, with a warning about penal interest and prompt reporting of defaults. Between banks: the importer's bank retires documents within 24 hours (or, if discrepant, retires or returns them within 5 days), the designated bank sends documents on within 24 hours; if the importer's bank is late, the designated bank may recover from it any penal interest it pays Bangladesh Bank, and the designated bank bears the penal interest for its own delay; any late deposit is the designated bank's sole responsibility, with interest.
Next: Lesson 39, Counterpart funds: exchange rates, penal interest and reports, finishes Part P and the import room.
Check yourself
30 questions, in 3 sets of up to 10. Nobody sees your answers but you.
Set 1 of 3
P-1: funds are deposited to Govt. Account No. IV A, or such other Government account as prescribed for the relative loan/credit/aid, maintained with Bangladesh Bank. (P-1)
P-1: within three working days from the date of receipt of documents. (P-1)
True. P-1 says the period is deemed inclusive of the date of receipt of documents and the date of deposit of counterpart funds. (P-1)
P-1 applies to all clean documents except discrepant documents received on collection basis or negotiated by foreign banks under reserve. (P-1)
P-1: three working days inclusive of the date of receipt and the date of deposit: Sunday, Monday, Tuesday. (P-1)
P-1: funds shall be deposited by the designated bank in Bangladesh. (P-1)
P-2: the bank should forthwith arrange acceptance of the documents by the importers. (P-2)
P-2: deposit counterpart funds within 5 (five) days from the date of receipt of the documents. (P-2)
P-2: in case of non-acceptance, the bank should return the documents to the negotiating bank or dispose of them in accordance with its instructions. (P-2)
False. P-2 says '5 (five) days'; it is P-1 that speaks of 'three working days'. (P-2)
Set 2 of 3
P-2: on non-acceptance, the bank should return the documents to the negotiating bank or dispose of them per its instructions. (P-2)
P-3: goods are procured and shipped by the loan giving agencies themselves or by their nominated agencies. (P-3)
P-3: documents are mailed either to the ERD of the Ministry of Finance or to the designated banks, as the case may be. (P-3)
P-3: the bank should arrange with the agency to pay the proceeds within a period of 7 (seven) days for deposit to Bangladesh Bank. (P-3)
P-3: the agency should be warned that it would be required to pay interest at penal rate in the event of delay beyond 7 days. (P-3)
P-3: cases of default should be brought to the notice of Bangladesh Bank promptly. (P-3)
P-3(a): the importer's bank must retire the documents not later than 24 hours from the time of receipt from the designated bank. (P-3)
P-3(a): the designated bank will be entitled to recover from the importer's bank any penal interest the former may have to pay to Bangladesh Bank. (P-3)
P-3(b): within 5 days from receipt, the importer's bank should either retire the documents or send them back to the designated bank. (P-3)
P-3(b): any delay will forfeit their right to raise objection on the ground of discrepancies. (P-3)
Set 3 of 3
P-3(c): the designated bank must send the documents to the importer's bank within 24 hours of receipt. (P-3)
True. P-3(c): for any delay at the designated bank's end, the penal interest relating to the period of delay will have to be borne by them. (P-3)
P-3(d): in all cases of delay, it will be the responsibility solely of the designated bank to deposit the Taka funds at the earliest along with interest at prescribed rate. (P-3)
P-3(c): the designated bank must send the documents to the importer's bank within 24 hours of receipt. (P-3)
P-3(a): if payment is not made within 24 hours, the designated bank is entitled to recover from the importer's bank any penal interest it has to pay to Bangladesh Bank. (P-3)
P-3(b): the importer's bank should retire or send back within 5 days; any delay forfeits its right to object on the ground of discrepancies. (P-3)
P-3: the bank should arrange with the agency to pay the proceeds within 7 days for deposit to Bangladesh Bank. (P-3)
True. P-3 says the documents are mailed to the ERD or the designated banks for retirement of documents and clearance of consignment from the Customs Authority. (P-3)
P-1 gives three working days, P-2 gives 5 days and P-3 gives 7 days for the agency to pay. (P-1 to P-3)
P-2: due to discrepancy, the negotiating bank abroad sends the documents on collection basis or under reserve or otherwise. (P-2)
Found this useful? Pass it on.
One tap before you go: which describes you best?
Anonymous. It only adds one to a count, so we know who the lessons are helping. We never learn who you are.