Bangladesh’s central bank has revised key provisions in its Offshore Banking Unit (OBU) guidelines to streamline trade finance and boost foreign trade, according to officials.

On Monday, Bangladesh Bank (BB) issued a notification amending the OBU directive, which was initially introduced on January 30, 2025. The update allows for greater flexibility in extending trade finance through Authorized Dealer (AD) banks, a move designed to support international business transactions.

The new provisions now enable OBUs to extend trade loans not only through the ADs of their own bank but also via ADs of other banks. However, this will require a comprehensive risk assessment, covering counterparty exposure and limits, to ensure financial security.

“This is a significant step forward in enhancing interbank collaboration for offshore financing,” a senior BB official told The Financial Express (FE). The official also noted that the revised regulations greatly expand the scope for such operations.

The senior official further clarified that any trade finance extended under the revised guidelines must still adhere to existing prudential credit norms and due diligence procedures.

Previously, OBUs were only permitted to extend trade finance to enterprises in both specialised and non-specialised zones through their own bank’s AD branches. The trade finance instruments could include buyer’s credit, accepted bill financing, and similar tools. The latest amendment, however, significantly broadens these options, potentially improving access to financing for businesses engaged in foreign trade.

This change is expected to foster greater collaboration between banks, facilitating smoother financial operations for businesses involved in cross-border trade.