The government will continue to give 15 percent incentive for rice export, but will not be applicable for aromatic rice.
In a clarification on Monday, the Bangladesh Bank said rice exporters will get this incentive, but export of aromatic rice will not come under the facility.
The central bank said that if exporters export rice, the government would give them a cash incentive at a rate of 15 percent.
"However, this benefit will not be applicable to aromatic rice," it added.
Earlier, in a circular dated January 30, 2020, Bangladesh Bank had said that it would provide incentives at the rate of 15 percent against rice exports.
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At that time, to encourage rice export trade, the government decided to give this subsidy in return for the export of rice produced and processed in the country.
The central bank sent the circular to the chief executives of all foreign exchange trading banks saying that the processor-exporter will get an incentive at the rate of 15 per cent on the net FOB value for rice exported by collecting rice grown in the country and processing it in its own factory.
Free on Board (FOB) is a term of sale under which the manufacturer quotes the price including all charges for placing goods on board a ship or aircraft. It is also called freight. The seller must clear goods for export.
This facility will not be available for export from companies located in specialized areas export processing zones (EPZ). At present, there are eight export processing zones. Its objective is to manage the various export-processing zones in Bangladesh. BEPZA currently oversees the operations of eight EPZs.
The government took the decision to give the cash subsidy to rice exporters, for the first time in the country's history with the view to encouraging shipment of the surplus grain.
The cash subsidy was declared upon recommendations from the finance and commerce ministries, said a central bank official.
Bangladesh had surplus rice of 34.95 lakh tonnes last fiscal year after production hit 3.73 crore tonnes, according to the agriculture ministry.
Exporters who want to get the cash subsidy will have to take prior permission from the commerce ministry and obtain certificates from the customs department, said the Bangladesh Bank notice.
The central bank will debit the amounts from banks if anyone provides the subsidy illegally. Strict actions also will be taken against officials involved in malpractice, according to the directive of the central bank.