Bangladesh, Aug. 27 -- The central bank of Bangladesh has allowed banks to issue foreign currency guarantees and standby letters of credit (SBLCs) on behalf of resident entities representing foreign firms that win contracts through international tenders, widening financing support for major projects.

Under the new arrangement, resident entities acting as strategic partners, local agents or authorised representatives of foreign companies may arrange the required bid bonds, performance guarantees or SBLCs for projects in Bangladesh, according to a notification issued by the Bangladesh Bank (BB) on Thursday.

The central bank issued the notification as a partial modification of the existing provisions governing the issuance of guarantees i...