Banks’ remittance service rules relaxed

Bangladesh Bank (BB) yesterday relaxed existing rules applicable on banks' remittance services in an attempt to increase the inflow of foreign currency and curtail volatility centring the foreign exchange market. 

From now, banks do not need to seek the central bank's approval for inking agreements with foreign exchange houses to mobilise remittance from abroad, according to a central bank notice.

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However, once the agreements are signed, the lenders will have to provide information in detail regarding the arrangements to the BB.

The BB also did away with the requirement of letters of references about the exchange houses from the Bangladesh embassy or high commission in the respective countries.

Still, banks must act with due diligence and determine whether they are satisfied with licences of the exchange houses issued by competent authorities.

A BB official said the revisions to the rules would make it easy for banks to sign the agreements and facilitate bringing in remittances.

Remittance inflow decreased 15 per cent year-on-year to $21.03 billion in fiscal year 2021-22 for the first time in six fiscal years, as per data from Bangladesh Bank.

However, it went up 14 per cent month-on-month to $2.09 billion last month.

The country's import payment also escalated to $82.49 billion in FY22 in contrast to $60.68 billion the year before.

Against this backdrop, foreign exchanges reserves stood at $39.66 billion as of August 9, whereas it was over $48 billion a year ago.