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Bangladesh Bank (BB) has introduced a new policy allowing Bangladeshi shipping companies and airlines engaged in international operations to maintain their foreign currency (FC) account balances in interest or profit-bearing renewable term deposits.
To this end, the central bank today (Sunday) issued a circular, BSS reports.
According to the circular, the measure aims to encourage the repatriation of foreign earnings and boost inward remittance inflows by enabling globally operating transport companies to better manage their growing foreign currency income through interest-generating instruments.
Under the new policy, Authorized Dealer (AD) banks are now permitted to convert balances held in eligible FC accounts into renewable foreign currency term deposits.
These deposits must be maintained in approved foreign currencies in line with Bangladesh Bank regulations, while the tenure of the deposits will be determined by AD banks following standard banking practices.
The facility has been specifically extended to Bangladeshi shipping companies and airlines conducting international business operations.
Bangladesh Bank noted that the new instructions represent an expansion of the regulatory framework previously established under SPA Circular No-2 dated April 10, 2023.
According to the circular, interest or profit rates on the deposits will be determined based on the banker-customer relationship and the relevant foreign currency involved.
However, all accrued interest or profit must be paid exclusively in Bangladeshi Taka (BDT), with conversion carried out using the prevailing spot exchange rate at the time of payment.
The circular emphasized that while the earlier circular issued by the Foreign Exchange Operation Department governed the opening and operational management of such FC accounts, the current amendment specifically addresses investment of balances and interest disbursement mechanisms.
Bangladesh Bank also instructed all Authorized Dealer banks to immediately inform eligible clients within the shipping and aviation sectors about the new facility.
The central bank further clarified that all previous instructions and operational guidelines relating to these FC accounts, except those modified under the latest circular, will remain unchanged and fully
effective.