In a decisive move to bolster the industrial sector and facilitate smoother trade transactions, Bangladesh Bank (BB) has announced that the usance period for imports of industrial raw materials will be capped at 270 days. The revised policy will take effect from 1 January 2026.
The announcement, detailed in a circular issued on 29 December 2025 by BB’s Foreign Exchange Policy Department, specifies that the new usance limit will apply to a wide range of imports, including industrial raw materials, back-to-back letters of credit (LCs), agricultural machinery, and chemical fertilisers. The facility will be available under the buyer’s credit arrangements provided by authorised dealers.
The circular emphasises: “The 270-day period or the applicable cash conversion cycle, whichever is shorter, shall apply.” This marks a significant adjustment from the previous temporary policy, which allowed a 360-day usance period set to expire on 31 December 2025.
Senior officials at BB explained that the new 270-day limit aims to strike a balance between maintaining sufficient cash flow for industrial importers and ensuring prudent management of the country’s foreign currency reserves. Banks and authorised dealers have been instructed to evaluate the cash conversion cycle of applicants based on historical transactions and business practices before approving any usance facility.
For back-to-back LCs, the usance period will be aligned with rules governing the remittance of export proceeds. Imports financed through the Export Development Fund (EDF) will not be eligible for the extended usance facility.
Throughout 2025, BB implemented several temporary policy adjustments. Notably, FE Circular No. 08 and FE Circular Letter No. 27 had increased the usance period from 180 days to 360 days to address post-pandemic market instability. However, with the current stability in the dollar market and adequate foreign currency liquidity in banks, the extended 360-day period is no longer deemed necessary.
Analysts suggest that the revised policy will support industrial growth while safeguarding the nation’s foreign currency reserves, providing a balanced approach to economic management.
Summary of Usance Policy Changes
| Parameter | Previous Limit | New Limit | Effective Date | Remarks |
|---|---|---|---|---|
| Industrial raw material usance | 360 days (temporary) | 270 days | 1 Jan 2026 | Or cash conversion cycle, whichever is shorter |
| Back-to-back LCs | Adjusted by export | Adjusted by export | 1 Jan 2026 | Aligned with export remittance rules |
| EDF-financed imports | Applicable | Not applicable | 1 Jan 2026 | Excluded from extended facility |
The 270-day usance policy reflects Bangladesh Bank’s commitment to sustainable industrial development and prudent foreign exchange management, ensuring the country’s trade ecosystem remains robust and well-regulated.