BB expands scope for non-resident clients

In a move aimed at boosting foreign-currency earnings, the central bank has permitted all scheduled banks to broaden their offshore-banking operations by offering a wider range of services to non-resident customers.

Offshore banking units (OBUs) can now extend services -- including trade-related functions such as advising, collection, and settlements -- to non-resident customers maintaining accounts with them, according to a notification issued by the Bangladesh Bank (BB) on Wednesday.

The services include, but are not limited to, trade-related transactions such as advising, collections, and settlements.

OBUs must comply with several directives in this regard, the notification said, adding that they are not allowed to undertake exposure or make financial commitments on behalf of customers for these services.

OBUs are also permitted to arrange the repatriation of inward remittances for credit to customers' accounts through internationally recognized money transfer operators, online payment gateway service providers (OPGSPs), digital wallets or card schemes, and other licensed payment service providers.

In such cases, OBUs must have appropriate arrangements with overseas operators for the repatriation of foreign currency, officials explained.

These arrangements will facilitate the crediting of repatriated funds to customers' accounts, the notification added.

If the repatriated funds belong to customers holding accounts with other OBUs or banks, the foreign currency must be transferred immediately to the beneficiaries' banks through the BD-RTGS system.

"The expanded scope will enable OBUs to generate higher service income in foreign currency by offering services to non-resident customers," a senior central banker told The Financial Express (FE).

siddique.islam@gmail.com