Offshore banking bill placed in parliament

The Offshore Banking Bill 2024 has placed in parliament today in a bid to enhance foreign exchange reserves and attract foreign investment.

Finance Minister Abul Hassan Mahmood Ali placed the bill, which was sent to the Parliamentary Standing Committee on the Finance Ministry for further examination.

The parliamentary watchdog was asked to submit its report within one day.

As per the proposed law, individuals will be allowed to conduct offshore banking business only through scheduled banks operating in Bangladesh.

A licence from Bangladesh Bank is required to conduct offshore banking. Scheduled banks which have already obtained this licence do not need to avail a new one.

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

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.

If anyone keeps money in offshore accounts, no question will be raised regarding its source.

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

Moreover, accounts of depositors or foreign lenders shall be exempt from all duty and levy.

The offshore banking operations can be conducted with five currencies – the US dollar, the British pound sterling, the European Union's euro, the Japanese yen, and the Chinese yuan.

The proposed law said there should be policies approved by the board of directors of scheduled banks in light of instructions passed by Bangladesh Bank for conducting offshore banking activities.

Separate books of account will have to be maintained for offshore operations of scheduled banks, which shall be used for verification of financial and other operations.

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

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

All funded and non-funded limits prescribed by Bangladesh Bank will be applicable for offshore banking business of scheduled banks.

Submission of all types of reports as directed by Bangladesh Bank will also be applicable.