(Bangladesh Bank F.E. Circular No. 79, dated 21 December, 1993)
Foreign partners of joint venture companies known as Type-B industries are now required to supply machinery and equipment to set up industries in the Export Processing Zones (EPZs).
It has been decided that in case of joint venture project in the EPZs, the foreign partners will have to arrange their contributions in foreign exchange from own or borrowed sources outside Bangladesh and local partners may similarly contribute their shares in local currency. In the event, however, the contributions as per joint venture project agreements made by the foreign partners are not sufficient to cover the cost of machinery and equipment, the shortfall may be made up, with the Bangladesh Bank's approval, by conversion of taka into foreign currency up to an amount not exceeding the local partners' shares / contributions referred to above.
Authorized dealers may also extend local currency loans on the basis of banker customer relationship without prior approval of the Bangladesh Bank within the limit of the contribution of the local share holders of Type-B industries as per project agreement. Foreign exchange released for import of machinery along with interest of any loan granted to them for this purpose will require be adjusting / repaying out of the foreign exchange earnings of the concerned industries.
Other instructions regarding extension of credit / remittance facilities to the different types of industries in the Export Processing Zones will remain unchanged.