Bangladesh Bank allows holding foreign loan collaterals without approval

In an effort to streamline international finance, the Bangladesh Bank has made provision for local commercial banks to hold collaterals on behalf of the on-resident lenders against external loans, availed by the state entities, without prior approval from Bangladesh Bank (BB).

“We’ve relaxed regulations allowing the authorised dealers (AD) banks to hold collaterals against external loans without prior approval from the central bank to facilitate transactions,” a BB senior official said.

He also said it will be applicable, if the foreign lenders seek collaterals against their loans, approved by Standing Committee on Non-Concessional Loan of Economic Relations Division (ERD).

Navojit Dastidar

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