bangladesh bank
Bangladesh Bank allows export income, remittance through MFS
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 Tk 1.69 lakh crore excess liquidity: Bangladesh Bank
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.
Money changers can keep Tk 50 lakh max: Bangladesh Bank
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.
Bangladeshis studying in China: Central bank allows paying tuition fees
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 lifts cap to loan coal-based power plants
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 re-fixes transactions hours from 10 am-3:30 pm
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
Remittances fall again in Oct, this time to 8-month low
Inward remittances fell year-on-year for the second month in a row in October, clocking $1.52 billion - down 7.4 percent on the same month last year, according to latest figures released by Bangladesh Bank.
Remittances had dropped year-on-year by 10.84 percent to $1.54 billion in September - a 7 month low at the time. It means the October figure is now the lowest in 8 months.
Yet thanks to the strong showing in the first two months (July-August) of the current fiscal, the overall figure for the first four months of 2022-23 still remains slightly above the corresponding figure for the same period in 2021-22.
According to the latest data from the central bank, inward remittances totalled $7.19 billion in July-October of FY23, slightly edging the $7.05 billion received in the same period last year, by barely 2 percent.
Bangladesh Bank spokesperson Md Abul Kalam Azad said in order to increase inflow, the central bank has increased the exchange rate of the US dollar offered on remittances.
Read: Remittance: Bangladesh Bank tells banks to provide Tk 107 per dollar
That is on top of a 2.5 percent hassle-free incentive already in place, while several banks also provide their own additional incentives to attract foreign exchange, Azad pointed out.
These however have failed to arrest the slide in remittances witnessed since September. Before that, remittances topped $2 billion in both July ($2.09 bn) and August ($2.03 bn).
Economists have been concerned that the unofficial or hundi channels may become more active in light of Bangladesh Bank's September 12 decision to fix three different rates for the dollar - one each for remittances, exports, and imports. The October remittance figure will add to those concerns.
Read more: Sept saw 25% drop in remittance, bankers blame fixed exchange rate
Ahsan H. Mansur of the Policy Research Institute, a leading think-tank, told UNB on Tuesday that remittances are on the decline due to remitters getting better rates through the unofficial channels, whereas banks are unable to offer them more than the Bangladesh Bank-fixed Tk 107 for each dollar.
Dr Mansur has been critical of the move to adopt three different rates for the dollar from the start, and insisted on the need to return to a single interbank rate, instead of the multiple rates fixed by the central bank in cooperation with the Association of Bankers Bangladesh, and BAFEDA - the association of foreign exchange dealers.
He has always held it to be a misguided policy because it "discriminates against small remitters" - precisely the ones who would seem to be moving away from the official channels since September.
Now the noted economist does not expect to see a change for the better till remitters can be offered a more competitive exchange rate.
Even so, the central bank remains eager to induce remittances through official channels as it reels from the dollar crisis and the declining trend of forex reserves.
The reserve figure is now below $36 billion according to Shapla Chattor's own count, even as the IMF continues to insist, and most economists agree, that the globally accepted way of calculating reserves would subtract another $8 billion from that figure.
Remittance: Bangladesh Bank tells banks to provide Tk 107 per dollar
Bangladesh Bank has asked banks to provide Tk 107 per US dollar inward remittance.
A remitter will now get Tk 107 per dollar, even if they send remittance directly through banks.
Currently, remitters are getting Tk 99.5 per dollar through the banking channel. Remittance flow through banks fell drastically in September and October.
Read more: Bangladesh Bank will go slow in calculating reserves following IMF formula
Apart from this, the banks will not charge any fee for remittance collection from now on. At the same time, in the current reality of foreign exchange reserves, banks have to open LCs with dollar resources from their own sources, Bangladesh Bank said to the commercial banks
These instructions were given on Monday (October 31, 2022) in a meeting between the central bank and the Association of Bankers, Bangladesh (ABB), an association of banks' chief executives, and the Bangladesh Foreign Exchange Dealers’ Association (BAFEDA)
Deputy Governor Ahmed Jamal and Kazi Sayedur Rahman were present at the meeting.
Read more: Bangladesh Bank asks banks to stop ACU transactions with Sri Lanka
ABB Chairman and BRAC Bank Managing Director (MD) Salim RF Hossain, on behalf of the banks, BAFEDA Chairman and Sonali Bank MD Afzal Karim, Mutual Trust Bank MD Syed Mahbubur Rahman, City Bank MD Masrur Arefin and others were present.
Besides, the central bank has asked to increase the number of exchange houses outside the country to encourage remittance collection directly through banks by reducing the dependence on foreign exchange houses. In this case, the central bank will provide the necessary assistance.
Banks have committed to implementing these decisions.
Read More: How to safely send remittance to Bangladesh?
Bangladesh Bank will go slow in calculating reserves following IMF formula
The Bangladesh Bank has recently agreed to calculate reserves following the international standard as advised by the International Monetary Fund (IMF), but the process will be slow considering it as a national sensitive issue, an official said on Sunday (October 30, 2022).
As per IMF suggestions, the central bank must follow the standard where spending for export development fund (EDF), loan to Sri Lanka and financing domestic projects from reserves must be excluded.
An executive director of Bangladesh Bank, preferring anonymity, told UNB on Sunday that in principle, the central bank has decided to follow the global standards to calculate the amount for foreign reserves.
Read: IMF team in talks with Bangladesh Bank officials on $4.5 loan
“If the process is followed, the reserves will be reduced to $27.8 billion from $35.8 billion as declared earlier,” he said.
A visiting IMF delegation was informed that Bangladesh Bank has taken a policy decision to publish accounts in line with international standards.
However, as the matter is sensitive, it needs approval from the government high-ups on when it will start, he said.
In addition to following the IMF's procedures, the accounts on the basis of the existing procedures will also be published.
Read: Remittance fell in Sep due to exchange rate volatility: Bangladesh Bank
Sector insiders say most of the world's foreign exchange reserves are calculated according to the IMF's Balance of Payments and International Investment Position manual.
But Bangladesh calculates net reserves and total foreign exchange reserves when it publishes the amount for foreign currency reserves. Funds provided to various sectors including EDF are excluded from the net calculation. Bangladesh Bank publishes the gross or total account of reserves.
Earlier Bangladesh Bank spokesperson Abul Kalam Azad said the central bank agreed to follow the IMF's suggestions on various issues including foreign exchange reserves.
Read More: Bangladesh Bank yet to allow Indian rupee in foreign trade
Tk 3,700cr Embezzlement: HC wants to know steps taken against 5 Bangladesh Bank deputy governors
The High Court today asked the Anti-Corruption Commission (ACC) to inform on the steps taken by Bangladesh Bank against its 5 accused deputy governors and other officials involved in the embezzlement of Tk 3,700 crore.
The court asked the ACC to inform on the steps within October 27.
The HC bench of Justice Nazrul Islam Talukder and Khijir Hayat verbally pronounced the order, after taking a recently published report in daily newspaper ‘Kalbela’ into cognizance.
Read: Banks must display citizen charter to ensure transparency: Bangladesh Bank
Lawyer Khurshid Alam Khan represented the ACC during the hearing while Deputy Attorney General AKM Amin Uddin represented the state.
DAG Amin Uddin said the bench asked the lawyers to read the report and present their statements before the hearing began today.
According to the report, 249 officials of Bangladesh Bank, including five deputy governors, were involvement with the financial scam of Bangladesh Industrial Finance Company Ltd (BIFC) and International Leasing and Financial Services Ltd (ILFSL).
With the help of these officials of three departments of the central bank, Prashanta Kumar Halder and Major (retd) Mannan embezzled a hefty amount of money which was revealed in a report of a high-powered probe committee formed at the directive of the High Court.
Two reports in this regard have already been submitted to the central bank’s governor, it said.
Tk 3700 crore was embezzled, taking loans from 2 capital market-enlisted financial organizations: BIFC and ILFSL. Out of this, from ILFSL, Tk 3,130 crore was taken against the name of PK Halder, who is currently imprisoned in India, and his various organizations. From BIFC, Major (retd) Abdul Mannan, Secretary General of Bikalpa Dhara Bangladesh, and his organization embezzled Tk 600 crore.
This plundering was going on for several years but the insiders of these organization and the responsible officials of Bangladesh Bank remained silent about the matter, said the report.
Read:Govt securities to trial trading in secondary market next week: Bangladesh Bank Governor
Three deputy governors, 6 executive directors, 11 general managers (GMs) and 15 deputy general managers (DGMs) and 124 other officials at various levels who served in the Financial Institutions and Markets Department of Bangladesh Bank from 2009 to 2020 were held responsible in the report.
Besides, a total of 51 people including two deputy governors and executive directors of the Bank and Financial Institutions Inspection Department have been held responsible.
Also name of two deputy governors, eight executive directors, five GMs and a total of 29 officials of the financial institution inspection department came up in this report.