The Bangladesh Bank Enforces the ACU Mechanism for Cross-Border Payments

Aiming to streamline payment processes, the Bangladesh Bank has instructed banks to refrain from using traditional methods for making direct payments to lenders in countries that are members of the Asian Clearing Union (“ACU”). The ACU mechanism is a payment arrangement for settling intraregional transactions among eight countries—Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka—that requires that payment transactions be conducted through central banks.