Bangladesh Bank has allowed mobile financial service (MSF) providers to bring inward remittance, in order to increase remittance inflow. The foreign exchange policy department of Bangladesh Bank issued a circular in this regard on Tuesday. According to the circular, authorized dealers can make drawing arrangements directly with exchange houses abroad without prior permission from Bangladesh Bank. Read more: Bangladesh Bank allows export income, remittance through MFS Authorized dealers are also allowed to go for drawing arrangements without letters of reference or certificates from the Bangladesh embassy or high commission of the respective country. In order to bring wider flexibility, MFS providers will be allowed to repatriate wage earners’ remittance in association with internationally recognized online payment gateway service providers, banks, digital wallets, card schemes, and aggregators abroad, said the Bangladesh Bank notification. In this context, MFS providers must have standing arrangements with foreign PSPs to receive foreign currency in their account, and equivalent taka value will be credited to the wage earners’ MFS accounts. Subsequently, foreign PSPs will provide credit to the designated dealer’s Nostro account (an account that a bank holds in a foreign currency in another bank). After receiving the amount in taka, wage earners’ can use the MFS account from abroad to do all transactions in Taka. Read more: BFIU suspends cash out from 230 MFS accounts over transactions through hundi Mobile financial services who want to provide repatriation services have to apply to Foreign Exchange Policy Department by December 31, 2022, with details of proposed arrangements in accordance with the framework outlined above or similar conducive procedures. Bangladesh Bank will primarily accord permissions, to review arrangements for piloting the initiative. Bangladesh rolled out MFS in 2011. Since then, the service has seen a boom in the country. At present, 13 MFS operators are providing services to more than 18 crore account holders who are transferring nearly Tk 3,000 crore daily.
Bangladesh Bank has formed a refinance scheme of Tk 5000 crore to boost food production and strengthen the country's food security. Farmers can take loans from this fund at a 4 percent interest rate. They can borrow from this fund for a maximum of 18 months with a grace period of three months. Bangladesh Bank issued a circular in this regard on Thursday and sent it to top executives of all banks. Farmers can take loans from this fund for crop cultivation, fish, poultry, dairy, vegetables, fruits, and flower firming. The central bank believes that there is risk of a global food crisis due to the disruption in supply chain and prices of food grains are increasing for this reason. In such a situation, to ensure the food security of the country, it is necessary to increase production. Read: No forex crisis from Jan 2023, Bangladesh Bank Gov says To this end, the central bank has decided to create a refinancing fund of Tk 5000 crore to maintain the flow of loans at low interest in the agricultural sector. The circular stated that only farmers will get loans from this fund. Small marginal farmers can take a single collateral-free loan up to a maximum of Tk 2 lakh for the cultivation of crops including rice, vegetables, fruits and flowers. According to the agricultural and rural loan policies of Bangladesh Bank, loans can be disbursed only against the related crop liability in the case of cultivation on a maximum of five acres of land. Besides, banks can provide loans if it wishes by taking collateral on the basis of the customer-banker relationship. Read: Bangladesh Bank curtails banks’ power to waive interest on loans The loan money from this fund cannot be used to adjust the customer's old loan. Loan defaulters will also not get loans from this fund, the circular stated. The duration of this loan disbursement is set to June 30, 2024, which would be increased if necessary.
Bangladesh Bank Governor Abdur Rouf Talukder has said there will be no foreign exchange crisis from January 2023, as the country's exports and remittances have become surplus compared to imports. He said this while speaking on the state of financial sector at the national seminar on LDC Graduation, organized by Economic Relations Division (ERD) in a Dhaka hotel this morning. Rouf said a Bangladesh Bank investigation found that the country's unusual import volume rose over $8 billion since beginning of this year. After looking into the matter and checking the imported goods, the imports fell to $5 billion, which is usual. Also read: Forex reserve: Why $10 billion in 2010 was not a worry, but $40 billion today is "We found in the investigation that some goods were imported with 20 percent to 200 percent over-invoicing. Import volume fell as we checked such incidents," he said. Bangladesh Bank is also working to check both under-invoicing and over-invoicing, to foreign exchange smuggling, and revenue earning, the Bangladesh Bank governor said. Also read: Forex reserves drop below $40 billion for the first time since 2020 There is restriction on LC opening, and the central bank is only looking into the LCs' values and actual market value of goods, which will continue to check foreign exchange smuggling through hundi, he said. Planning Minister MA Mannan was the chief guest at the programme. Principal secretary Dr Ahmed Kaikaus, FBCCI president Md Jasim Uddin, ERD secretary Sharifa Khan, also spoke in the function.
Bangladesh Bank is seeking to curtail the powers of the banks’ board of directors to waive interest on loans without consultations with the relevant departments. The central bank’s Banking Regulations and Policy Department on Wednesday issued a circular in this regard. It instructed the banks in case of interest waiver they have to take the opinion of the head of internal control and compliance (HICC) through internal audit department. Read more: Bangladesh Bank allows export income, remittance through MFS The circular stated that in essential cases, the opinion of the HICC should be taken through the internal audit department of the bank to confirm the rationale of relaxation of the conditions for collection of funds. It said that banks can waive interest on loans due to various uncontrollable reasons such as death of the borrower, natural calamities, epidemics, flood, due to distress, or closed project bank loan interest may be waived in whole or in part. But recently, it has been seen that the banks often waive the interest of various customers without considering these special circumstances. Read more: Can Bangladesh Bank make depositors feel safe ? “This may create disinclination among the customers to pay the bank dues within the stipulated time to get the interest waiver facility, which is against the overall credit discipline in the banking sector,” it said. For this purpose, to create awareness among the customers to pay the bank's dues within the prescribed period, maintain overall credit discipline and protect the customers' interests, the new guidelines should be followed in the waiver of all types of interest.
Bangladesh Bank has allowed mobile financial service (MFS) providers to repatriate (conversion of foreign currency into local currency) export income and inward remittance. All authorised dealers will provide encashment certificate to MFS providers against inward remittance, on account of information technology enabled services (ITES) exports. In order to make it easier to receive foreign exchange, Bangladesh Bank issued a circular stating that all authorised dealers in foreign exchange and all licensed MFS providers are allowed to receive export income on account of ITES exports in association with internationally recognised OPGSPs/digital wallets and/or aggregators having operation in multiple countries. The Foreign Exchange Policy Department of the central bank issued the notification on Wednesday and sent it to authorised dealers and MFS providers for immediate implementation. Read more: Towards a cashless society: MFS monthly transactions cross Tk 1.11 lakh crore The notification said that authorised dealers maintaining settlement accounts will issue encashment certificates in support of inward remittances on request from MFS providers electronically. In this case, the request needs to be supported by auto-generated information – beneficiary’s name, wallet account number, the amount in taka, date of credit – from a remittance service provider abroad. Based on their own screening parameters regarding the information, designated authorised dealers shall generate an electronic encashment certificate (as per enclosure A) with QR code accessible to beneficiaries through MFS providers. Read more: MFS sector led financial transactions during Covid-19 pandemic: Nagad MD The certificate is intended to be used for income tax purpose only.
Banks have excess liquidity of Tk 1.69 lakh crore, and rumours on social media are unfounded, Bangladesh Bank spokesperson Md. Abul Kalm Azad said today. He was addressing a press conference at the central bank to brief reporters on misinformation circulating in social media regarding bank deposits and liquidity. “Conspiratorial news is being circulated on social media. Investors are being asked to withdraw their bank deposits. It is being said that banks do not have cash or that there’s a iquidity crisis,” he said. Read: Bangladesh Bank brushes off liquidity crisis 'rumour,' says people's money safe in banks “But this is not true. The banking system of Bangladesh is very sound. There is no liquidity crisis as the banking system currently has excess liquidity of Tk 1.69 lakh crore,” Azad said at the press conference. Bangladesh Bank as issued a special warning to managing directors of commercial banks regarding the liquidity situation. If there is any disruption in the liquidity management of a bank, the central bank will take steps to resolve it with utmost importance. Read: Banks to enjoy 24 holidays in 2023: BB No bank has shut down in 51 years of Bangladesh's history, he pointed out. “People's deposits in banks are completely safe. Nothing has happened to cause panic over people’s hard-earned savings in banks,” Azad assured.
Bangladesh Bank in a directive on Thursday said that money changers trading in foreign currency can keep a maximum of Tk 50 lakh cash at hand. The Foreign Exchange Policy Department of Bangladesh Bank issued a circular in this regard and sent it to the top executives of banks for immediate effect. According to Foreign Exchange Transactions Guidelines, the maximum stock of cash of a money exchanger must not exceed $25,000 or equivalent at the close of each business day. If their cash dollar amount is more than this limit then at the end of the day the establishment should deposit it in the foreign currency account of the respective bank. The balance of that account must not exceed $50,000 or equivalent at any point in time. Read: Remittance: Bangladesh Bank tells banks to provide Tk 107 per dollar The central bank sealed seven unlicensed, illegal institutions on September 27 and 28 due to dollar manipulation in the country. Before that, 42 companies were served show cause notice due to various irregularities in dollar trading. The licenses of five more establishments have also been suspended. The latest circular aims to establish a stable foreign exchange market in the country.
The central bank has allowed banks to assist Bangladeshi students in China to pay their tuition fees. Bangladesh Bank issued a circular in this regard on Wednesday (November 09, 2022). Read more: Bangladesh Bank lifts cap to loan coal-based power plants According to the circular, Bangladeshi students enrolled at educational institutions in China are still studying under online arrangements from Bangladesh due to Covid-19-related travel restrictions imposed by the country. “These students are now applying for visas for which the due tuition fees need to be paid. So, it has been decided that authorised dealer banks may continue to effect outward remittances on account of these students till September 30, 2022 subject to observance of usual regulatory instructions,” the Bangladesh Bank circular said. Read more: Study in Japan: Scholarships, Tuitions, Application Process for Bangladeshi Students
Bangladesh Bank (BB) in a directive has withdrawn the lending limit for coal-based power plants aiming to increase power generation. As per the directive, banks can lend money to set up coal-based power plants as required for power generation in the next 5 years. Read more: First coal shipment for Rampal power plant arrives from Indonesia Md. Ali Akbar Faraji, director of banking regulation and policy department, issued the notification as Bangladesh is struggling to run gas-based and diesel-run power plants amid rising oil prices because of the Russia-Ukraine war. It says the banks can provide necessary loans for setting up coal-based power plants, including the purchase of land, import and purchase of machinery, expenses related to the installation of machinery, and maintenance of coal-based power plants. Read more: Matarbari coal-fired power project gets costlier As a result, the calculation of lending 25 percent of the reserved capital to get bank loans will not be effective for the next five years. In July, Bangladesh Bank gave such instructions for six months.
Bangladesh Bank on Thursday (November 03, 2022) announced new transaction hours and office timing for bankers with effect from November 15. According to the new circular of the department of Off-site Supervision of the central bank, banking transaction hours have been set from 10 am to 3.30 pm while the banks’ office hours from 10 am to 5 pm from Sunday to Thursday. Read more:Office timing rescheduled for 8:00 am to 3:00 pm to save electricity Bankers' existing office timing is from 10 am to 4 pm. On August 22, the government of Bangladesh rearranged the office timing from 8:00 am to 3:00 pm for all the government and autonomous offices and from 9:00 am to 4:00 pm for all banks in a bid to save electricity amid short supply. The decision was effective from August 24. Read More: Govt mulls rescheduling office timing amid power shortage, says energy advisor