Foreign Loans for Bangladesh Businesses: Who Approves What After the September 2026 Changes?

Summary. The September 2026 position is not one blanket relaxation. Bangladesh Bank’s consolidated FEPD-1 Circular No. 32 of 2 September 2026 initially placed medium- and long-term external borrowing by specialised-zone industrial enterprises under Bangladesh Bank approval. Fourteen days later, FEPD-1 Circular No. 35 corrected the route: that requirement does not apply to specialised-zone enterprises registered with the Invest Bangladesh Authority (formerly BIDA), and formerly Economic Zone companies must submit proposals to the Authority’s Scrutiny Committee on Foreign Loan/Supplier’s Credit. Outside specialised zones, the general route remains prior authorisation by the Invest Bangladesh Authority, subject to specific general permissions, including the July 2026 permission for qualifying foreign-owned or foreign-controlled enterprises borrowing from parents, associates or shareholders. This article follows the transaction from term sheet to approval, drawdown, reporting and repayment, and identifies the document gaps most likely to stop money moving.

Status checked: This article reflects the Bangladesh position checked as of 23 September 2026.

The short answer: approval follows borrower, zone and loan type

The commercial problem is simple to state. A lender and a Bangladesh borrower agree the amount, tenor, price, security and use of funds. The money still cannot necessarily be sent. Foreign-exchange permission, a nominated authorised dealer bank (AD), zone status, project evidence and the wording of the loan documents must align before disbursement. A file can be commercially bankable yet administratively incomplete.

The September 2026 changes matter because the first consolidated circular and the later clarification must be read together. Circular No. 32 repealed and consolidated the previous one-year instructions, while preserving the reporting instructions in the Guidelines for Foreign Exchange Transactions (GFET). It stated that medium- and long-term borrowing by industrial enterprises in specialised zones required Bangladesh Bank approval. Circular No. 35 then amended that sentence so that the requirement applies only to specialised-zone industrial enterprises other than those registered with the Invest Bangladesh Authority. [1] [2]

The practical decision tree is therefore:

1. Is the borrower a private-sector industrial enterprise outside a specialised zone? The default route is prior authorisation from the Invest Bangladesh Authority for borrowing from abroad, subject to a relevant Bangladesh Bank general permission or current-commercial-transaction exception.
2. Is it a specialised-zone enterprise registered with the Invest Bangladesh Authority? The medium- and long-term proposal goes to the Authority’s Scrutiny Committee on Foreign Loan/Supplier’s Credit.
3. Is it a specialised-zone enterprise not registered with that Authority? The approval route is Bangladesh Bank, with the application submitted through the nominated AD and onward through the relevant zone authority.
4. Is it a fully foreign-owned or foreign-controlled industrial enterprise using the July 2026 parent/associate/shareholder general permission? The qualifying transaction may proceed under that permission, but the AD must verify every condition and complete the required reporting. [3]

That is a route map, not a conclusion that every loan is approved. The loan agreement, purpose, pricing, tenor, debt-equity profile, repayment plan and documentary record still determine whether the relevant authority or AD can act.

What changed in September 2026 — and what did not

Circular No. 32 created the apparent conflict

On 2 September 2026, Bangladesh Bank issued FEPD-1 Circular No. 32 as a consolidated circular on loans, overdrafts, guarantees and external borrowings. It said that earlier instructions were repealed except for GFET Volume 2 reporting instructions, and that the circular would remain valid for one year unless read with later instructions. [1]

For specialised zones, paragraph 27 initially said that medium- and long-term external borrowing was subject to Bangladesh Bank approval. It prescribed a route through the nominated AD, the relevant specialised-zone authority and then Bangladesh Bank’s Foreign Exchange Investment Department (FEID). The same circular separately said that proposals for borrowing from abroad by private-sector industrial enterprises in Bangladesh required prior authorisation of the Invest Bangladesh Authority. It carried forward the long-standing Appendix-3 application and documentary framework.

Read in isolation, the two provisions create a predictable question: does a zone enterprise apply to Bangladesh Bank or the investment authority? The answer is now supplied by Circular No. 35.

Circular No. 35 is the operative clarification

On 14 September 2026, Bangladesh Bank stated that the paragraph 27 requirement did not apply to industrial enterprises in specialised zones registered with the Invest Bangladesh Authority, formerly BIDA. It replaced the relevant sentence with this rule: medium- and long-term external borrowing by specialised-zone industrial enterprises other than those registered with the Invest Bangladesh Authority is subject to Bangladesh Bank approval. It also directed that loan proposals of formerly Economic Zone companies be submitted to the Authority’s Scrutiny Committee on Foreign Loan/Supplier’s Credit. The other provisions of Circular No. 32 remained unchanged. [2]

For a CFO, lender or investor, the change is not cosmetic. “In a zone” is no longer enough to identify the approving authority. The file must establish the enterprise’s registration status and, for a formerly Economic Zone company, its route to the Authority’s Scrutiny Committee. A zone lease, licence or allotment document may show location, but it does not by itself prove the registration status that controls the approval path.

The July general permission remains part of the picture

Bangladesh Bank’s FEID Circular No. 03 of 15 July 2026 granted general permission for external borrowing from parent companies, associates or shareholders by qualifying foreign-owned or foreign-controlled industrial enterprises operating inside and outside specialised zones. It applies to manufacturing and service activities, not trading businesses, and divides the treatment between short-term and medium/long-term borrowing. [3]

That permission does not erase the need for an AD-controlled file. It changes the question from “which committee will approve this?” to “does the transaction fit the exact general permission, and can the AD document that fit?” If the transaction exceeds the permission, falls outside its borrower or lender relationship, or uses proceeds for an excluded purpose, the application must be forwarded to the appropriate authority for approval.

Start with classification, not the draft loan agreement

The first workstream should be a written classification memo. It should state the borrower’s ownership, business activity, registration authority, location, proposed lender, currency, tenor, purpose, pricing, security, repayment structure and expected route. That memo should be agreed before the parties spend time negotiating representations that assume the wrong approval mechanism.

Borrower and activity

Circular No. 03 covers fully foreign-owned industrial enterprises and also makes the short-term outside-zone facility available to foreign-controlled industrial enterprises as defined in the earlier circular. The outside-zone borrower must be engaged in manufacturing or services and not merely trading. The enterprise should therefore map the actual revenue-generating activity to its registration documents, licences and audited accounts.

Specialised-zone enterprises are categorised for foreign-exchange purposes as Type A, Type B and Type C. Type A is 100% foreign-owned, including an enterprise owned by Bangladeshi nationals ordinarily resident abroad. Type B is a joint venture between foreign investors and Bangladesh-resident entrepreneurs. Type C is 100% owned by Bangladesh-resident entrepreneurs. [1]

The July general permission for medium- and long-term parent, associate or shareholder borrowing is specifically framed for fully foreign-owned industrial enterprises. It should not be assumed to cover a Type B or Type C enterprise simply because foreign capital, a foreign lender or a foreign manager is involved.

Place of business and registration

The file should identify whether the factory or project is outside a specialised zone, in an Export Processing Zone or private EPZ, in an Economic Zone, or in a Hi-Tech Park. It should also identify the authority under which the enterprise is registered. The September clarification uses registration with the Invest Bangladesh Authority as the dividing line for the zone route, not location alone. [2]

The safest evidence is a coherent set: incorporation and registration documents, the zone authority’s allotment or licence, the investment or project registration, and any current certificate or correspondence showing the responsible authority. Where the company was formerly registered as an Economic Zone company, the handover should expressly address submission to the Scrutiny Committee on Foreign Loan/Supplier’s Credit.

Loan category and term

Do not call a facility “working capital” in the term sheet and then describe capital machinery, construction or project expansion in the approval file. The purpose, tenor and drawdown mechanics must tell the same story.

Under Circular No. 03, short-term borrowing is less than one year; medium term is one to five years; and long term is above five years. The short-term outside-zone permission allows a cost-free loan for general working capital, excluding input procurement, without prior Bangladesh Bank approval. An alternative cost-bearing short-term loan may cover bona fide business purposes, including input procurement, with an all-in cost no higher than 3% per annum, bullet repayment at maturity and an aggregate tenor, including rollovers, of no more than three years from first drawdown. It cannot be converted into medium- or long-term borrowing under that permission. [3]

Medium- and long-term borrowing under the July permission must be for capital expenditure, including capital machinery or goods, legitimate services and civil construction. A medium-term cost-free borrowing may be up to USD 50 million or its equivalent in another convertible currency. A cost-bearing medium-term loan may be up to USD 5 million, with an all-in cost no higher than 3% per annum. Bullet repayment is permitted for a medium-term loan up to USD 5 million. [3]

For long-term borrowing, cost-free funding is encouraged and any applicable rate may not exceed 3% per annum. Bullet repayment is not permitted. The borrower must maintain a satisfactory track record, and the debt-equity ratio for cost-bearing external borrowing must not exceed 80:20. No debt-equity ratio is specified in that provision for cost-free loans, although the AD still has to assess the file and comply with applicable prudential and foreign-exchange requirements. [3]

The transaction sequence: term sheet to approval

1. Lock the regulatory assumptions in the term sheet

A cross-border term sheet should include a condition precedent stating the approval or general-authorisation basis, the nominated AD, the permitted use of proceeds, the currency, the repayment source and the documents required before first drawdown. It should not promise “all regulatory approvals” as a single undefined deliverable.

The lender should ask for a route schedule. The schedule can identify: the responsible authority; the filing party; the required form; the zone authority’s role; the AD’s pre-disbursement checks; the expected reporting; and what happens if the facility is amended. The borrower should reserve enough time for translations, notarisation or certification where required by the AD or authority, rather than treating those steps as a closing formality.

2. Assemble the Appendix-3 core file

The consolidated circular carries the foreign-borrowing application form from the 1998 Board of Investment notification, updated in the text to refer to the Invest Bangladesh Authority. The form asks for the enterprise’s name, address and registration or permission letter; the issuing authority; industry type; foreign lender details; principal amount; purpose; draft or final agreement; effective interest rate; repayment period; effective date; down payment; borrowing type; project viability analysis; debt-servicing capacity; cost competitiveness; market and production-capacity analysis; sponsor indebtedness; reasons for borrowing; a brief repayment schedule; nominated bank; and supporting papers. [1]

The listed supporting papers include a certified copy of the memorandum and articles of association, a board resolution approving the loan proposal and the pro forma invoice for machinery to be imported. The form also requires an auditors’ certification for specified financial information. The practical file will usually need to be broader where the AD or authority must test the project, cash flow, source of repayment, tax treatment, security and ownership structure.

The application should be internally reconciled before submission. The loan amount in the board resolution, application, agreement, financial model, invoice and drawdown schedule should match. The lender’s legal name should match the account instructions and know-your-customer file. The facility purpose should match the capital-expenditure budget. The repayment schedule should be capable of being funded by the projected cash flows.

3. Use the correct route for the borrower

For an outside-zone private-sector industrial enterprise, the default statutory-administrative route in Circular No. 32 is prior authorisation from the Invest Bangladesh Authority. Applications use Appendix-3 and supporting analyses. Short-term supplier or buyer credit of up to one year remains subject to Bangladesh Bank instructions on current commercial transactions rather than the approval process in the 1998 notification. [1]

For a specialised-zone enterprise registered with the Invest Bangladesh Authority, Circular No. 35 sends medium- and long-term proposals to the Authority’s Scrutiny Committee on Foreign Loan/Supplier’s Credit. The parties should not continue using the old assumption that every zone proposal goes first to Bangladesh Bank.

For a specialised-zone enterprise not registered with the Authority, paragraph 27 of Circular No. 32 remains operative. The application and documents are submitted in the Appendix-3 format through the nominated AD, forwarded via the relevant zone authority to Bangladesh Bank’s FEID. The AD first checks completeness and prima facie correctness. The zone authority reviews and forwards the proposal with observations. FEID scrutinises it and communicates the decision to the zone authority, the enterprise and the AD. [1] [2]

For a qualifying July general-permission transaction, the relevant authority may not issue a case-by-case approval before drawdown. The AD still has to ensure that the borrower, lender relationship, purpose, pricing, tenor, repayment and documentary conditions fit the permission. Circular No. 03 expressly requires applications beyond the general authorisation to be forwarded to the appropriate authority. [3]

4. Make the agreement approval-ready

The agreement should be drafted around the permitted transaction, not around a generic international form. It should identify the borrower’s Bangladesh address and registration status, the lender relationship, the currency and account, permitted uses, drawdown conditions, interest and fees, repayment dates, prepayment, taxes, withholding, events of default, security, governing law, dispute resolution, notices and amendment mechanics.

A facility that permits unrestricted working-capital use may not fit a medium- or long-term capital-expenditure permission. A capital-expenditure facility that permits an uncapped bullet at maturity may not fit the long-term rule. A cost-bearing loan whose fees are omitted from the all-in-cost calculation may exceed the permitted 3% ceiling. These are drafting failures, not merely post-closing reporting issues.

Security also needs early review. The July permission requires the AD to verify compliance before disbursement, and the consolidated circular separately regulates guarantees and repayment commitments. A corporate guarantee from the borrower or group may be treated differently from an AD-issued repayment guarantee or SBLC. If the lender requires the local AD to issue a repayment commitment, the AD must apply to Bangladesh Bank and provide, among other things, evidence of eligible collateral, at least 25% cash margin or unencumbered encashable bank deposits, a credit assessment, conditional board or management approval, and the Invest Bangladesh Authority’s external-borrowing approval. [1]

Disbursement is a regulatory event, not a wiring instruction

The nominated AD controls the channel

For an approved loan, the AD that receives the funds must be able to identify the approval, agreement, repayment schedule and reporting trail. Circular No. 32 requires the relevant credit agreement and repayment information to be forwarded in the prescribed reporting process. Under Circular No. 03, all disbursements, payments and repayments for medium- and long-term borrowing must be routed through the nominated AD. [1] [3]

For the July general permission, proceeds are credited to a foreign-currency account maintained by an AD in the name of the fully foreign-owned industrial enterprise in a specialised zone under general authorisation. Bangladesh Bank also gives general authorisation for ADs to maintain such accounts for industrial enterprises outside specialised zones to credit loan proceeds. Funds may be accumulated in those accounts for repayment. [3]

That account architecture should be built into the closing checklist. The lender’s payment instruction should identify the borrower’s AD and account. The borrower should not ask the lender to send funds to an unrelated account to “speed things up.” A mismatch between the approval, account holder, bank and payment instruction can cause the AD to hold or return funds while the file is repaired.

The AD’s pre-disbursement checklist

Before releasing a medium- or long-term drawdown under the July permission, the AD must ensure compliance with the circular and completion of the documentation described in Annexure-A under Appendix-3 of the 2025 circular, as incorporated by the 2026 framework. It must also check the permitted use, track record, debt-equity ratio where applicable, account arrangements, repayment schedule and relevant AML/CFT, tax and reporting requirements. [3]

A sensible lender-side closing certificate should therefore cover at least: the approval or general-authorisation basis; evidence that conditions precedent are satisfied; borrower and lender identity; the signed agreement; the board authority; project and machinery documents; the amount and currency of the drawdown; the permitted use; the interest and fee calculation; the account; and the repayment schedule. The certificate should not state that Bangladesh Bank has approved a transaction if the facility is proceeding under a general permission.

Reporting deadlines are part of the funding timetable

For qualifying medium- and long-term parent, associate or shareholder loans, ADs must report disbursement details and required documents to FEID at Bangladesh Bank’s head office within 14 days of disbursement. Any amendment to the borrowing agreement must be reported within seven days. The AD must preserve documents for inspection, ensure proper utilisation and make the required statistical and quarterly returns. [3]

For outside-zone short-term transactions under the July general permission, the AD must report post facto to FEID within one week of execution, in addition to routine Bangladesh Bank reports. That one-week period should be tracked from execution of the transaction, not casually from the first payment date. [3]

The consolidated circular also requires the concerned AD, through its head office, to submit a consolidated quarterly statement of foreign loans approved by the Invest Bangladesh Authority or Bangladesh Bank. The statement identifies the borrower, lender, sector, purpose, approval decision, sanction date, disbursement date, repayment period, number of borrowings and specific information and comments on utilisation. It must be sent within 15 days after the end of each quarter. [1]

Repayment: the source of funds and the evidence matter

Repayment under the general permission

For medium- and long-term borrowing under Circular No. 03, repayment must be made from funds available in the borrower’s foreign-currency account, and the repayment schedule and instalment sizes must be commensurate with projected cash flows. Each instalment may not exceed USD 5 million or its equivalent. Repayment, like disbursement and payment, must be routed through the nominated AD. [3]

The long-term prohibition on bullet repayment is important at the term-sheet stage. A lender may prefer a single maturity payment, but that structure is not permitted for the long-term category under the July general permission. Medium-term bullet repayment is permitted only for loan amounts up to USD 5 million. A proposed maturity profile that ignores this distinction can force a renegotiation after credit approval.

Circular No. 03 also permits outstanding borrowings, including accrued cost, to be converted into equity at any time, subject to applicable procedures. A medium-term loan can be converted into long-term borrowing if the existing agreement is amended or a new agreement is executed in accordance with applicable procedures. Neither option should be treated as an automatic right to bypass a new approval requirement where the amended transaction falls outside the general permission. [3]

Repayment of loans approved by the investment authority

For term loans approved by the Invest Bangladesh Authority, the consolidated circular allows ADs to remit principal, interest and admissible charges abroad without prior reference to Bangladesh Bank, subject to the stated conditions. Remittances must be made through the AD through which the foreign credit was originally received, after applicable taxes are deducted and paid. For convertible-foreign-exchange loans, the AD must report the date and amount of receipt, identify the returns or schedules where the receipts were reported, and forward the credit agreement and repayment schedule. [1]

Supplier’s credit has an additional evidential gate. Before remitting any instalment of interest or principal, the borrower must provide attested bills of entry showing the actual arrival of the relevant capital goods in Bangladesh. The AD forwards those bills of entry with the credit agreement and repayment schedule in its report to Bangladesh Bank. The commercial lesson is direct: import evidence is part of the repayment file, not a document to locate only when the first instalment falls due. [1]

Tax, cash flow and maturity discipline

The AD must deduct applicable taxes and ensure payment before remittance. The borrower’s financial model should therefore distinguish gross debt service from the net amount that the lender receives and should allocate for withholding or other tax consequences under the applicable law and treaty position. This article does not determine the tax rate for a specific loan; the transaction should be reviewed on its facts.

The projected cash-flow model should be consistent with the repayment schedule filed at approval or maintained under the general permission. If the business plan assumes export proceeds but the enterprise has no foreign-currency revenue, the file needs a credible funding route for repayment. If the facility will be repaid from accumulated foreign-currency balances, the account and reporting trail should show how those balances arise lawfully.

The document problems that delay funding

Wrong authority named in the application

The most visible September risk is filing a specialised-zone application with the wrong authority. A zone enterprise registered with the Invest Bangladesh Authority should not be routed on the assumption that paragraph 27 still sends every medium- or long-term proposal to Bangladesh Bank. Conversely, a zone enterprise not registered with the Authority should not assume that its zone location alone creates a general authorisation.

The cure is a route memo supported by current registration evidence. The memo should quote the relevant Circular No. 35 distinction and identify whether the enterprise is a formerly Economic Zone company. It should also state whether the transaction is an approved proposal or a July general-permission transaction.

Inconsistent corporate identity

An application can stall when the borrower’s name differs across the certificate of incorporation, investment registration, zone document, bank account, board resolution, loan agreement and invoice. A foreign lender’s name can create the same issue after a merger, fund restructuring or assignment. Prepare a one-page identity schedule showing every legal name, registration number, address, ownership relationship and signing authority.

Purpose and invoices do not match

The authority and AD must be able to see what the proceeds will buy or fund. “Expansion” is not a complete capital-expenditure description. The file should identify machinery, construction packages, legitimate services or other permitted expenditure and support the amount with pro forma invoices, contracts, budgets or a project schedule. Where part of the facility is for input procurement or general working capital, the parties should test whether that tranche belongs in a different short-term category.

The cost calculation is incomplete

The Appendix-3 form defines effective interest as the stated annual rate plus annualised fees such as commitment, syndication, front-end and project-appraisal fees. A low coupon does not solve a high fee problem. The borrower should prepare an all-in-cost worksheet showing each fee, when it is payable, the calculation period, currency conversion and effect on the annualised cost. [1]

Debt-equity and track-record evidence is missing

For cost-bearing medium- and long-term borrowing under the July permission, the 80:20 debt-equity condition must be tested. The AD also needs evidence of a satisfactory track record with no history of default in servicing external obligations. Audited accounts, existing-loan statements, lender certificates, CIB information and a current debt schedule should be assembled before signing, not after a query.

Repayment schedule is commercially unrealistic

The official file asks for debt-service capacity and a repayment schedule. An instalment profile that exceeds projected cash flows, uses a prohibited long-term bullet, or ignores the USD 5 million instalment cap is more likely to produce a clarification request. Model base, downside and delayed-commissioning cases and explain the source of repayment in each case.

Import evidence is unavailable at repayment

For supplier’s credit, missing bills of entry can prevent remittance even where the loan was approved. The borrower should instruct its customs, procurement, finance and treasury teams to preserve the documents against each drawdown and machinery shipment. The schedule should link each repayment instalment to the relevant import record.

Amendments are treated as private contract changes

An amendment to amount, tenor, price, lender, purpose, repayment or security can change the regulatory analysis. Circular No. 03 requires amendments to be reported to Bangladesh Bank within seven days. An amendment that goes beyond a general permission may need approval rather than a simple report. [3]

Reporting ownership is unclear

The AD is the reporting party in several provisions, but the borrower must supply accurate documents and utilisation information. The loan agreement should identify who prepares the data, who signs certificates, who stores originals, who tracks the seven-day, 14-day, one-week and quarterly deadlines, and who tells the lender when a drawdown or amendment has occurred. A reporting failure should not be discovered when the next repayment is due.

A practical closing checklist for CFOs and lenders

Before signing, ask five questions. First: what exact authority or general permission permits this loan, and what evidence proves the route? Second: does the borrower’s ownership, activity and zone registration fit that route? Third: do purpose, tenor, pricing, fees, security and repayment match the permission? Fourth: has the nominated AD confirmed the pre-disbursement documents and account mechanics? Fifth: who owns each post-closing report and repayment document?

At approval, maintain a version-controlled data room containing the final application, authority correspondence, signed agreement, board resolutions, corporate records, registration evidence, financial model, audited accounts, debt schedule, CIB or banker reports, invoices, repayment schedule, tax analysis and AD correspondence. Record every question and answer. The aim is not to produce a larger file. It is to make the regulatory story capable of being checked from one document to the next.

At drawdown, use a single funds-flow diagram. It should show lender, borrower, nominated AD, foreign-currency account, permitted use, expected supporting evidence and reporting deadline. At repayment, add the source of funds, tax deduction, relevant import evidence where applicable, AD remittance record and reference to the original receipt report.

The approach is useful for a lender’s legal opinion too. The opinion should state its assumptions about registration, authority, corporate power, execution, exchange-control permission and the AD’s role. It should distinguish enforceability of the loan agreement from permission to remit, and it should not convert an administrative uncertainty into a categorical statement of law.

What to do next

The September change rewards classification before drafting. Confirm the borrower’s location and registration, identify whether the enterprise is registered with the Invest Bangladesh Authority, test whether the July general permission applies, and have the nominated AD review the route and document list before the lender fixes its closing date.

For a Bangladesh or cross-border matter involving the approval route, finance documents, regulatory conditions or a legal opinion, begin with the TRW contact route. TRW’s practices directory and homepage provide further context on the firm’s Bangladesh and international work. Any engagement, scope and advice would depend on the facts and applicable conflict and onboarding checks.

FAQs

1. Does every foreign loan to a Bangladesh company need prior approval?

No. The default rule for private-sector industrial borrowing from abroad is prior authorisation by the Invest Bangladesh Authority, but Bangladesh Bank instructions contain exceptions and general permissions. Short-term supplier or buyer credit up to one year is treated under current-commercial-transaction rules, and Circular No. 03 gives qualifying foreign-owned or foreign-controlled industrial enterprises general permission for specified parent, associate or shareholder loans. The transaction must fit the exact exception; otherwise it should be submitted for approval.

2. Who approves a medium- or long-term foreign loan for a specialised-zone enterprise after September 2026?

If the enterprise is registered with the Invest Bangladesh Authority, its proposal goes to the Authority’s Scrutiny Committee on Foreign Loan/Supplier’s Credit. If it is a specialised-zone enterprise other than one registered with that Authority, the Bangladesh Bank route in Circular No. 32 applies, through the nominated AD and the relevant zone authority. Formerly Economic Zone companies are specifically directed to submit proposals to the Authority’s Scrutiny Committee.

3. Can a foreign-owned Bangladesh factory borrow from its parent without a case-by-case approval?

It may be able to do so under FEID Circular No. 03, but only if the borrower, lender relationship, activity, tenor, purpose, amount, pricing and repayment terms satisfy the relevant general permission. Medium- and long-term proceeds must be for capital expenditure. A transaction outside the general permission must be forwarded to the appropriate approval authority.

4. Can a medium- or long-term foreign loan be used for working capital?

Not automatically. The July 2026 general permission for medium- and long-term parent, associate or shareholder borrowing requires capital-expenditure use, including machinery, legitimate services and civil construction. Separate short-term permissions address working capital, with different conditions for cost-free and cost-bearing facilities. The term sheet and funds-use schedule should separate categories rather than relabel an ineligible use.

5. What must happen before the lender disburses?

The nominated AD must be satisfied that the applicable approval or general authorisation is identified, the required agreement and corporate documents are complete, the permitted purpose and pricing are met, and the account and funds-flow arrangements are correct. Under Circular No. 03, documentation under the applicable Appendix-3 framework must be completed before disbursement for the covered medium- and long-term borrowings. Disbursement must be routed through the nominated AD and then reported within the applicable period.

6. What documents can delay repayment of a foreign loan?

Common problems include an inconsistent borrower or lender identity, missing approval evidence, an incomplete repayment schedule, missing evidence of the original receipt, unpaid or unanalysed taxes, unsupported amendments and, for supplier’s credit, missing attested bills of entry proving that the relevant capital goods arrived in Bangladesh. The AD must be able to connect the repayment to the approved or authorised transaction and its reporting trail.