Bangladesh Bank issued a circular in this regard on June 23 and sent it to the chief executives of all scheduled banks in the country. The central bank stated that this initiative has been taken with the objective of ensuring maximum utilization of the funds sent by expatriates and expanding offshore banking activities.
According to the circular, expatriates can open these accounts against foreign currency sent through legal banking channels. These accounts can be opened in all forms, including savings, current, or fixed term deposit accounts.
Remittances, funds transferred from other non-resident accounts, earned interest or profits, and income derived from approved investments or the stock market in Bangladesh can be deposited into this account.
The biggest advantage of this account is its full repatriability. That is, the principal amount deposited in the account and the earned profit can be transferred abroad without any hindrance at any time.
In addition, these funds can be used in various sectors within the country. These include Foreign Direct Investment (FDI), portfolio investment, local payments, and transfer to other foreign currency accounts.
Under the new rules, using this fund, an opportunity has been created to provide loans in local currency to Type-A industrial enterprises in special economic zones such as BEZA, BEPZA, and BHIEDP. However, these loans can only be used to pay current expenses such as salaries, wages, and utility bills, and must be repaid through export earnings.
In addition, expatriates can also avail loan facilities from local banks by keeping the balance of this account as collateral. Although these loans can be used for personal or business purposes, their use for investment in the agricultural, plantation, and housing sectors will be prohibited. However, this money can be used for purchasing residential property or for non-repatriable investments. Those involved in the banking sector believe that this initiative will make remittance management more dynamic and create new investment opportunities for expatriates in Bangladesh. At the same time, it will play a positive role in the liquidity management of industrial enterprises in special economic zones.
