Customs & Trade
Cash Incentive Circular (August 2017)
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Executive Summary
The Cash Incentive Circular of August 2017 (Bangladesh Bank FE-2 Circular dated 30 August 2017) is the foundational document establishing the modern cash incentive regime for exporters. While the regime has been updated multiple times since (most recently in September 2024 via Circular EF-3), the 2017 Circular established the core architecture: (1) classification of exporters into 6 categories (RMG, non-RMG textile, leather, agro, jute, other), (2) eligibility criteria including minimum export value thresholds (USD 1M/year for most sectors, USD 0.5M for jute), (3) documentation requirements (EE-2 quarterly return, EXP forms, B/L, bank realization certificate), (4) verification procedure via Bangladesh Bank foreign exchange inspection, (5) audit provisions with 5-year lookback window, (6) clawback mechanism for erroneously claimed incentives (with 7.5% penalty). The Circular also introduced the bank's role as the first-line approver for cash incentive claims, reducing processing time from 90 to 60 days.
Key Points
- Bangladesh Bank FE-2 Circular dated 30 August 2017
- Foundation of modern cash incentive regime
- 6 exporter categories: RMG, non-RMG textile, leather, agro, jute, other
- Min export threshold: USD 1M/year (USD 0.5M for jute)
- EE-2 quarterly return mandatory
- Documents: EXP forms, B/L, bank realization certificate
- Bank is first-line approver (60-day processing, was 90)
- 5-year audit lookback window
- Clawback: erroneously claimed incentives + 7.5% penalty
- Updated by EF-3 September 2024 (current rates)
- Bangladesh Bank foreign exchange inspection verifies claims
- Fundamental architecture unchanged since 2017
Full Details
Official circular from Bangladesh Bank regarding cash incentive provisions for exporters. Details the process, documentation, and verification requirements for claiming cash incentives.