Relaxed usance period extended for another six months to ease LC payment pressure

The Bangladesh Bank has extended the relaxed usance period facility for the imports of industrial raw materials including back-to-back imports, agricultural machinery and chemical fertilisers under supplier's or buyer's credit for another six months with a view to lessen the pressure of import payments.

Banks now will be able to defer the LC payments against the imports of these products until 30 June next for up to 360 days, according to a circular issued by the central bank yesterday. 

The extended usance period will not be applicable for imports under EDF loans, says the circular.

A high official of the Bangladesh Bank told The Business Standard that the central bank on 20 July this year had extended the usance period on imports of industrial raw materials, agricultural machinery and chemical fertilisers to 270 days from 180 days. Later the period was extended to 360 days, he added.

The decision to extend the relaxed usance facility is expected to help reduce the present pressure of LC payments, he continued.

A usance or a deferred letter of credit (LC) means that even after buyers have received goods or services, they get a grace period to make the payment to banks or other lenders.