Back-to-back import LCs for export producers
The facility is for bonded exporters
Part G of FEPD-1 Circular No. 30 allows authorised dealers to open back-to-back import letters of credit against export letters of credit received by export-oriented industrial units that operate under the bonded warehouse system. The opening is subject to the domestic value-addition requirement prescribed by the Ministry of Commerce from time to time. The requirement is expressed as a permissible limit on the value of imported inputs as a percentage of the FOB export value of the output. This page does not print a percentage. The Ministry’s current figure is the figure. Many ready-made garment exporters use this route because they are bonded export units. The circular’s test is the bonded export unit, not the word “garment”.
Opening conditions that are actually written
The unit must have a valid CCI&E registration and a valid bonded warehouse licence. The master export LC must remain valid long enough to import the inputs, manufacture, and ship. The back-to-back value must not exceed the admissible percentage of the net FOB value of that master LC, and the import price must be competitive. Net FOB is the LC value after deducting freight, insurance, and commission payable by the exporter. If freight is not shown separately, the circular tells the AD to ask the shipping company or agent for a certificate. Amendments to the master LC have to be noted so the import LC does not creep above the permitted input value. Back-to-back credits are not opened against barter or STA export LCs without Bangladesh Bank’s prior approval.
Usance, with two sight exceptions
Part G says the back-to-back import LC is opened on a usance basis for a period in line with Part D of the same circular, and that interest for the usance period must not exceed the rate Part D prescribes. This page does not restate that rate. The same paragraph then states the exception already noted under EDF: back-to-back LCs opened against the Export Development Fund, or against NFCD balances, may be on sight basis, subject to the relevant instructions.
Inland back-to-back
The circular also allows inland back-to-back credits in foreign exchange in favour of local manufacturer-suppliers of inputs, against master export LCs of bonded export manufacturers, up to the value-addition or utilisation-permit limit. That is still a Part G facility. It is not a domestic taka LC dressed up with a foreign-currency label.
Documents and proceeds
The import leg is still examined under the rules the import LC incorporates. The export leg still has to bring the proceeds home within the period in FEPD-1 Circular No. 26, generally four months, unless that circular’s own exception applies. A back-to-back structure does not extend the repatriation period by itself. Read Part G for the import opening. Read Circular 26 for the export proceeds.
Source
Bangladesh Bank, FEPD-1 Circular No. 30, 13 August 2026, Part G, paragraphs 1 and 2. The value-addition percentage is the one the Ministry of Commerce prescribes. This page does not invent that percentage. Open the cited source.
Frequently asked questions
Who may request the facility?
Export-oriented industrial units under the bonded warehouse system. The unit needs a valid CCI&E registration and a valid bonded warehouse licence. The circular does not extend the facility to every factory.
What must the master export LC cover in time?
Its validity must be long enough to import the inputs, manufacture the goods, and ship them to the consignee.
Are back-to-back credits always at usance?
Part G says they are opened on a usance basis in line with Part D, except that credits opened against EDF or NFCD balances may be at sight, subject to those instructions.