Foreign firms get nod for bank guarantees on government tenders

Foreign companies can now obtain bank guarantees from any scheduled bank operating in Bangladesh to bid for international tenders.

Bangladesh Bank approved the facility on Thursday, allowing banks to issue the guarantees in foreign currencies for such tenders.

The facility is open only to foreign companies operating in Bangladesh, and each guarantee must be tied strictly to the project.

Banks must follow rules, risk-management requirements and lending policies when issuing the guarantees, while also taking collateral.

Companies receiving foreign currency against these guarantees can settle the amount in local currency.

The central bank directed banks to observe single-borrower exposure limits on these guarantees, with board or authority approval sought where needed.