The Offshore Banking Act, 2024 was passed in Parliament on Tuesday as part of a stated objective to enhance the country's reserves of foreign currency and attract foreign investment although it is feared that money laundering from the country will be increased through offshore banking.

Finance Minister Abul Hasan Mahmud Ali placed the bill in the House which was passed by voice vote.

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Earlier, while participating in the discussion on the bill, four Jatiya Party MPs including Opposition Chief Whip Mujibul Haque Chunnu, Hafiz Uddin Ahmed, Masud Uddin Chowdhury and Ruhul Amin Hawlader demanded to send the bill to a committee for eliciting public opinions.

But their proposal was rejected by voice vote.

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This is the first time the government is writing legislation on offshore banking in the country.

Chunnu said that big thieves, big fishes, state leaders, smugglers use offshore banking to make their money legal through banking in island countries like the Bahamas and thus launder the money abroad.

He also said names of some people from Bangladesh who have appeared in the newspaper.

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“They also laundered money through offshore banking, built houses and hotels abroad. It would be good if those thieves who have smuggled Bangladeshi money abroad bring back the money without giving any tax. But it seems money launderers won’t bring back the money.”

Instead Chunnu fears increased money laundering from the country through offshore banking.

Hafiz Uddin portrayed a sorry state of the country’s banking sector.

He alleged that S Alam Group laundered Islami Bank's money to Singapore.

Hafiz Uddin also said, “I do not know whether Bangladesh Bank will supervise the local banks. Bangladesh Bank's own money is being smuggled abroad and they are not aware of it. How can they supervise banks?"

Masud Uddin said what we hear about offshore banking is that money is smuggled from Bangladesh to Bermuda and kept in other places.

“This has given us a negative impression about offshore banking. Through this law, a lot of foreign currency can come to the country tax free. But how to address its negative impact?”

As per the proposed law, non-resident individuals or foreign firms, who will invest here, can open offshore bank accounts.

A license from Bangladesh Bank is required to do offshore banking. Those who have obtained this license do not need to have a new license.

As per the proposed law, no individual will be allowed to do offshore banking business apart from any scheduled bank working in Bangladesh.

The offshore banking operations can be done with the five currencies –US Dollar, Pound, Euro, Japanese Yen and Chinese Yen.

Any relative of a Bangladeshi living abroad can open an account and manage the account as a supporter.

Now foreigners who deposit money under the internal banking system of Bangladesh, need permission to remit the money from the country. But in the case of offshore banking, they can do it freely.

The move for offshore banking is not only to increase reserves but also to gain financial benefit.

If someone keeps money in that offshore account, no one will ask about the source of the money.

The individuals or firms who are living abroad or the foreign ones will be allowed to open bank accounts under the proposed law.

It said that there should be policies approved by the bank board for the Related schedule Bank in the light of instructions given by Bangladesh Bank for conducting offshore banking activities.

Separate books of account shall be maintained for offshore operations of Scheduled Banks which shall be used for verification of financial and other operations.

Asset Liability Management guidelines of respective banks shall be applicable for offshore banking activities.

Funds can be transferred from domestic banking units to offshore banking units with the special approval of Bangladesh Bank, as per the proposed Law.

All the funded and non-funded limits prescribed by Bangladesh Bank shall be applicable to offshore banking business of Scheduled Banks.

Submission of all types of reports as directed by Bangladesh Bank shall be applicable for offshore banking business of scheduled banks.

Business interest or profits payable by the depositors or foreign lenders shall be exempt from direct and indirect taxes.

Accounts of depositors or foreign lenders shall be exempted from any duty and levy.