BB to roll out debit card for payments at home, in India

The central bank is going to roll out the country's own debit card by August to allow travellers to make payments at home as well as in India, said Bangladesh Bank Governor Abdur Rouf Talukder yesterday. 

Under the current practices, travellers have to buy US dollars before travelling to India and convert them into the rupee when they are in the neighbouring country.

As a result, they face exchange rate losses twice, which could be as high as 6 per cent, said the governor while speaking at an event organised to launch the new monetary policy statement for the next financial year.

But the holders of the debit card named "Taka Pay Card" will be able to make payments against local bills as well as purchases in India within their travel quota limit as it will be tagged with the rupee, he said.

Banks and financial institutions will issue the card.

Talukder said the card will allow Bangladesh to save a huge amount of money since a lot of people travel to India for health, tourism and religious purposes.

The Indian High Commission in Bangladeshi issued 15 lakh visas to Bangladeshis last year.

So, if Bangladeshi travellers can make payments using the debit card for purchases in India, it would give a boost to the foreign exchange reserve, which has come under strain owing to higher import bills.   

The issue of currency arrangements with China and India also came up at the press conference.

Talukder said Bangladesh has not gone for any currency swap with China and India.

He said the Chinese yuan is a reserve currency approved by the International Monetary Fund.

In 2016, China's yuan was added to the IMF's basket of reserve currencies. As a result, the yuan joined the US dollar, the euro, the yen and British pound in the special drawing rights basket.

"So, we have told banks that if there is a demand, they can open LC (letter of credit) in the yuan. It has nothing to do with the currency swap," said the governor. 

He said Bangladesh is looking to carry out trades with India in the rupee up to the level that is covered by the export earnings from the country.

Bangladesh's imports from India far outweigh exports to the country. Its exports to the country stand at $2 billion currently against imports of $18 billion through official channels.

But if the trades through the unofficial channel are added, imports would go up to $27 billion, said Talukder.

"But the availability of the rupee is low. So, we are trying to execute trades in the Indian currency. This will allow us to minimise exchange rate losses."

None of the arrangements with China and India are part of any currency swap, he said.