Bangladesh Bank allows remittance recipients to hold funds in foreign currency

Bangladesh Bank has allowed recipients of remittances sent through foreign exchange houses and international money transfer operators (IMTOs) to deposit the funds into foreign currency accounts, expanding the scope for keeping remittances in foreign currency.

Under a circular issued by the central bank’s Foreign Exchange Policy Department-2 on Wednesday (September 23), such remittances can be credited to Private Foreign Currency (PFC) and Non-Resident Foreign Currency Deposit (NFCD) accounts, subject to existing foreign exchange regulations and prescribed conditions.

The move is aimed at facilitating foreign currency deposits and providing greater flexibility to remittance recipients. Previously, the facility was available for remittances received through banking channels, while the new directive extends it to funds received through exchange houses and IMTOs.

Authorized dealer banks will have to comply with applicable know-your-customer (KYC), anti-money laundering and counter-terrorist financing (AML/CFT) requirements when opening or crediting such accounts. Banks must also follow existing reporting and other regulatory requirements governing foreign currency transactions.

The new arrangement will allow eligible recipients to retain part of their remittances in foreign currency instead of converting the entire amount into taka, while all existing rules governing foreign exchange transactions will remain in force.