Executive Summary
This portal compiles and translates the three Bangladesh Bank BRPD instructions on Post Import Financing (PIF). The June 2021 circular is the base policy; the April 2022 circular letter replaces and expands selected paragraphs; and the October 2022 circular letter further clarifies the related-party/same-group position for cross-border finished-goods imports.
Essential consumer goods: 90 days
Other trading goods: 120 days
Agriculture/agri machinery/animal-sector goods: 180 days
Industrial raw materials: 210 days
Essential consumer goods: +30 days
Other trading goods: +30 days
Agriculture/agri machinery/animal-sector goods: +60 days
Industrial raw materials: +60 days
No PIF against local LC. Same-group/related-party cross-border import of finished goods may receive PIF after Oct 2022, subject to usual banking/regulatory checks.
Circular Evolution Map
| Date / Circular | Role | Main content | Current status |
|---|---|---|---|
| 13 June 2021 BRPD Circular No. 12 | Base PIF policy | Introduced consolidated PIF policy for LTR/LATR/MTR/MPI-type funded facilities; set definition, tenor, approval, restructure/reschedule, monitoring and reporting framework. | Still valid except paragraphs replaced/updated later. |
| 26 April 2022 BRPD Circular Letter No. 12 | Major amendment | Replaced paragraphs 2.1, 2.2, 2.3(O), 2.3(P), 2.4(K), 2.5(P), and 2.5(S). Added EDF exclusion, expanded product categories, increased industrial raw material tenor to 210 days, added agricultural/animal-sector tenor, and product-wise CL-3 reporting. | Controls current tenor and most current operational wording. |
| 26 October 2022 BRPD Circular Letter No. 41 | Specific clarification/update | Modified the position on PIF for same-group/related-party transactions: PIF can be provided for cross-border import of finished goods through the banking system between same-group/related parties, provided it is not against local LC. | Latest position on related-party cross-border finished-goods imports. |
Current Compiled Rule
1. Definition
All funded loan facilities given to settle import liabilities in different sectors—such as essential consumer goods, trading goods and industrial raw materials—whether called LTR, LATR, MTR, MPI or by any other name, are to be called Post Import Financing (PIF). Financing under EDF is excluded from PIF and must follow EDF-related policy.
2. Product categories and maximum tenor
| Category | Examples | Maximum original tenor from PIF creation | Maximum one-time extension | Maximum total if extension approved |
|---|---|---|---|---|
| Essential consumer goods | Rice, pulses, onion, garlic, spices, edible oil etc. | 90 days | 30 days | 120 days |
| Other trading goods | Trading goods other than essential consumer goods | 120 days | 30 days | 150 days |
| Agricultural/agri machinery/animal-sector imports | Fertilizer, seeds, pesticides, agricultural machinery; nutrition inputs, vaccines, medicines for fish/domestic animals/birds etc. | 180 days | 60 days | 240 days |
| Industrial raw materials | Raw materials for industry/production | 210 days | 60 days | 270 days |
3. Approval and limit discipline
- Banks must have Board-approved policy for LC establishment and PIF approval, consistent with Bangladesh Bank credit risk, ICRRS and related instructions.
- The policy must clearly state collateral requirements and delegation of approval authority for LC and PIF limits on borrower-wise and aggregate basis.
- Each LC/PIF approval must verify whether unused approved limit is available.
- If an LC is to be adjusted by PIF on lodgement/payment, the bank must ensure that PIF limit is or will be available and that goods have been imported according to LC terms.
- Rescheduled PIF converted into term loan remains counted as PIF for unused limit calculation. Forced loans created to settle import liabilities must be counted within PIF/LC limit.
4. Overdue restriction
If a customer has overdue PIF, no new PIF may be granted. If the overdue occurred due to reasons beyond control and a new PIF is required before classification, it must be approved by the Board. Between Board meetings, the Board may specially empower the Managing Director; the MD must place justification before the next Board meeting. Foreign banks operating in Bangladesh must take approval from the local highest authority.
5. Local LC and related-party transactions
- PIF cannot be provided against local LC.
- Same-group or related-party purchase-sale through the banking system was generally prohibited under the earlier wording.
- After the October 2022 update, PIF may be provided for cross-border import of finished goods between same-group/related parties through the banking system, provided the transaction is not an import against a local LC.
6. Restructure, extension and rescheduling
- Restructure/extension requires justification and Board approval, subject to the maximum one-time extension table above.
- Before extension, banks must consider seasonality, nature of trading, whether goods remain unsold under borrower’s control, and whether extension is being sought for hoarding.
- Rescheduling due to reasons beyond control may be done under bank-customer relationship and rescheduling policy with Board approval.
- If multiple PIFs are rescheduled together, each PIF must remain separately identifiable by sanction date, nature, limit, purpose, sanctioning authority and supporting documents; facilities must be covered by collateral.
7. Recovery, monitoring and reporting
- Banks must form a dedicated PIF Monitoring Unit for LC establishment, PIF disbursement, recovery and monitoring.
- The unit should have experienced staff in banking law, loan recovery, foreign trade rules and recovery strategies; a Deputy Managing Director should supervise.
- Internal audit must review LC/PIF activities quarterly or whenever necessary.
- External audit terms of reference should include overall LC/PIF information and irregularities.
- Banks need a specific action plan for recovery of overdue/classified PIF and PIF converted into term loans.
- Quarterly progress should go to Board Risk Management Committee and then Board; Board opinion and information must be sent to Bangladesh Bank BRPD Taskforce Cell and Department of Off-site Supervision within 10 working days of the Board meeting.
- PIF is a demand loan and must be reported in CL-3 with product name, e.g., PIF-Product Name.
- Forced Loan-PIF must be separately shown in Statement of Affairs and reported in CL-3.
- Rescheduled PIF converted into term loan must be reported in CL-4 as RSDL(1/2/3)-PIF.
- Regular stock reports must be collected. If inconsistency is detected between unadjusted PIF balance and stock, the bank must take legal action against the importer.
Bangla-to-English Translation
BRPD Circular No. 12 dated 13 June 2021 — translated essence
The circular introduced the policy for Post Import Financing. It stated that funded facilities given after import for settlement of import liabilities—commonly known as LTR, LATR, MTR or MPI—will be treated as PIF. It instructed banks to frame Board-approved policies covering definition, sector and tenor, approval process, restructure/rescheduling, recovery and monitoring.
The initial maximum tenors were 90 days for essential consumer goods and 180 days for industrial raw materials. It required Board-approved delegation, collateral policy, borrower-wise and aggregate limits, verification of available limit before LC/PIF, no new PIF if existing PIF is overdue except beyond-control cases with Board approval, and no PIF against local LC or transactions among same-group/related entities. It also required a PIF Monitoring Unit, internal/external audit coverage, recovery action plan, reporting in CL-3/CL-4, and legal action where stock inconsistency is found.
BRPD Circular Letter No. 12 dated 26 April 2022 — translated essence
This letter replaced selected paragraphs of the 2021 circular. It clarified that EDF financing is not covered by PIF. It revised the tenor structure: essential consumer goods 90 days; other trading goods 120 days; agricultural/agri machinery/animal-sector imports 180 days; industrial raw materials 210 days. It refined the overdue-new-PIF exception and allowed the Board to delegate interim special power to the Managing Director. It restated no PIF against local LC and no PIF for same-group/related purchase-sale under the then wording. It revised extension limits: 30 days for essential consumer and other trading goods; 60 days for agriculture/agri machinery/animal-sector goods and industrial raw materials. It also required CL-3 reporting with product name and legal action if stock report mismatch is found.
BRPD Circular Letter No. 41 dated 26 October 2022 — translated essence
This letter updated the related-party position. It stated that for facilitating international trade/business and increasing foreign investment, where the transaction is not an import against local LC, PIF may be provided for import of finished goods through cross-border transactions between same-group or related entities through the banking system. Other instructions of BRPD Circular Letter No. 12/2022 remain unchanged.
AD Bank Compliance Checklist
Original Circular Pages
The original Bengali circular pages are embedded below as page images. The translated/compiled tabs above should be used together with these original pages.
BRPD Circular No. 12 dated 13 June 2021 — Initial PIF Policy
BRPD Circular Letter No. 12 dated 26 April 2022 — Replacement/Update
BRPD Circular Letter No. 41 dated 26 October 2022 — Related-party Cross-border Finished Goods Update
PIF Tenor & Applicability Checker
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PIF Validation Checklist
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PIF Policy Quiz & Certificate
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