Press Release on Implementation of Bill Discounting for Government Contracts (Works)(08 Jan 2025)

January 07, 2025 - The Ministry of Finance in collaboration with the Financial Institutions of Bhutan (FIAB), is pleased to announce the launch of the Bill Discounting facility.

This financial facility aims to:

1. Enhance cashflow and liquidity for contracting firms;
2. Improve operational efficiency by reducing payment delays;
3. Ensure smooth project execution.

Bill Discounting is a financial product/instrument wherein a contracting firm can obtain immediate cash from a bank or financial institution by discounting their bill receivables from the government agencies. This initiative aims to improve liquidity in the construction sector by providing timely access to funds and ensuring smooth business operations by addressing cash flow gaps by converting receivables into immediate cash. The Bill Discounting facility will operate through a collaborative process involving the contracting firm(Drawer), financial institutions, and procuring agencies. Under this arrangement, the financial institutions provide discounted payments upfront based on receivables verified and confirmed by the procuring agencies.

Initially, the facility will be piloted for the government works only, with plans for gradual expansion to include goods and services contracts.

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