Use ACU mechanisms for paying members’ banks: BB

Bangladesh Bank yesterday instructed banks to refrain from traditional mechanisms of making direct payments to lenders in countries which are members of Asian Clearing Union (ACU).

Banks would have to instead adhere to the ACU mechanism of conducting transactions through central banks when making the payments, said a notice issued by the BB.

The ACU is an arrangement for settling payments for intra-regional transactions among eight countries: Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.

Industry insiders said banks in Bangladesh were conducting transactions with lenders in India through the traditional mechanisms of making payments among themselves, which was compounding pressure on Bangladesh's foreign exchange reserves.

The Foreign Exchange Transactions Guidelines 2018 outlines operational procedures to settle payments for current account transactions under ACU mechanisms with the ACU member countries.