Offshore Banking Bill in parliament, standing committee gets one day for review

The Offshore Banking Bill 2024 was placed in Parliament on Saturday as part of a stated objective to enhance the country's reserves of foreign currency and attract foreign investment.

Finance Minister Abul Hasan Mahmood Ali introduced the bill and it was sent to the Parliamentary Standing Committee on Finance Ministry for further examination. The committee was asked to submit its report within one day.

As per the proposed law, non-resident individuals or foreign firms, who will invest in Bangladesh, can open offshore bank accounts.

A licence from Bangladesh Bank is required to do offshore banking. Those who have obtained this licence do not need to have a new licence.

The offshore banking operations can be done with the five currencies – US Dollar, Pound, Euro, Japanese Yen and Chinese Yen.

Any relative of a Bangladeshi living abroad can open an account and manage the account as a supporter.

Now foreigners who deposit money under the internal banking system of Bangladesh need permission to remit the money from the country. But in the case of offshore banking, they can do it freely.

The move for offshore banking is not only to increase reserves but also to gain financial benefit.

If someone keeps money in that offshore account, no one will ask about the source of the money.

The individuals or firms who are living abroad or the foreign ones will be allowed to open bank accounts under the proposed law.

As per the proposed law, apart from scheduled banks operating in Bangladesh, no individual will be allowed to do offshore banking business.

It said that there should be policies approved by the bank board for the related scheduled bank in the light of instructions given by Bangladesh Bank for conducting offshore banking activities.

Separate books of account must be maintained for offshore operations of scheduled banks which will be used for verification of financial and other operations.

Asset liability management guidelines of respective banks will be applicable for offshore banking activities.

Funds can be transferred from domestic banking units to offshore banking units with the special approval of Bangladesh Bank, as per the proposed Law.

All the funded and non-funded limits prescribed by Bangladesh Bank will apply to offshore banking business of scheduled banks.

Submission of all types of reports as directed by Bangladesh Bank will be applicable for offshore banking business of scheduled banks.

The bill proposed that in the offshore banking business interest or profits payable by the depositors or foreign lenders should be exempt from direct and indirect taxes.

Accounts of depositors or foreign lenders will be exempt from any duty and levy.