FOREIGN CURRENCY ACCOUNTS
Opening of FC accounts with ADs in Bangladesh
(i) The ADs may without prior approval of the Bangladesh Bank open FC accounts in the names of
(a) Bangladesh nationals residing abroad
(b) foreign nationals residing abroad or in Bangladesh and also foreign firms registered abroad or in Bangladesh and also foreign registered abroad and operating in Bangladesh or abroad
(c) Foreign mission and their expatriate employees. Foreign exchange earned through business done or services rendered in Bangladesh can not be put into these accounts. Credit to a foreign currency account may be made against inward remittance of foreign exchange in any form or transfer from another FC account or non-resident Taka accounts of banks abroad. Bangladesh Bank may specially allow opening of foreign currency accounts not covered by this general authorization.
(ii) Payment may be made freely abroad from these foreign currency accounts to the extent of balance lying therein. Local disbursements may also be made freely in Taka from such foreign currency accounts.
(iii) No payment in foreign exchange may be made to or on behalf of any resident in Bangladesh out of the foreign currency accounts opened as per the above arrangement. However, this restriction will not apply in case of foreign diplomats and privileged persons or any other persons or firm who have specific authority from the Bangladesh Bank to accept such payments. Bills of the local contractors of the foreign missions in Bangladesh may also be settled in foreign currency from the balances of the foreign currency accounts of such missions. In such cases the beneficiary of the bill will have to encash the foreign currency with any AD within one month from the date of receipt.
(iv) Any payment received in foreign exchange by the ADs on behalf of residents of Bangladesh must not be retained in foreign exchange but must be converted into Taka unless AD is satisfied that the payee has general / special permission of the Bangladesh Bank to retain the foreign exchange.
(v) The ADs maintaining foreign currency accounts under his authority can pay interest / profit on such accounts provided the accounts are maintained in the form of term deposits for a minimum period of 90 days. Rates of interest / profit payable on such accounts should normally be comparable with the rates available on similar accounts maintained abroad.
2. Bangladesh nationals working and earning abroad including self employed Bangladeshi migrants proceeding abroad on employment may open foreign currency accounts even without initial deposits. They may operate the accounts themselves or nominate other persons in Bangladesh for this purpose. The account can be opened either in Pound Sterling, US$, Deutsche Mark or Japan’s Yen at the option of the prospective account holder and maintained as long as the account holder desires. These accounts would ordinarily be fed from remittances by account holders themselves but funds sent by other wage earners may also be placed to the credit of such accounts. ADs may also raise credits to such accounts with the proceeds of convertible foreign exchange viz. currency notes, travelers cheques, drafts etc. brought into Bangladesh by the account-holders while on excess of US$5000 (or its equivalent) has been duly declared by them to the Customs on Form ‘FMJ’ at the time of their arrival. Funds lying to the credit of FC accounts of Bangladesh nationals can be utilized for import of goods and commodities as per instructions issued by the CCI&E and Bangladesh Bank.
3.Foreign currency accounts in the names of the Diplomatic Bonded Warehouse (duty free shops) licensed by the Custom Authorities may be opened by the ADs without prior approval of the Bangladesh Bank on following conditions:
a) Convertible foreign currency (travelers` cheques, drafts, cheques or credit card settlements) received only on account of sale of merchandise may be credited to these accounts.
b) Foreign exchange may be remitted abroad only for the purpose of import of merchandise by the bonded warehouse. For the same purpose foreign exchange may also be transferred from such accounts to foreign currency accounts maintained with other ADs. For meeting local expenses, foreign exchange from these accounts may be encashed freely at current exchange rate. The requirement of encashment of at least 50% of the gross profit / interest (sale price of merchandise minus purchase price of merchandise) of the Bonded Warehouse in foreign exchange should be duly fulfilled.
c) Monthly statement of purchase, sale and foreign exchange transaction related thereto along with bank certificate concerning encashment in Taka shall be submitted to the Bangladesh Bank in prescribed form.(See ch.2,Vol.2)
4. Foreign currency accounts in the names of local and Joint Venture contracting firms employed to execute projects by foreign donors / international donor agencies may also be opened by the ADs as per terms of the approved contract without prior permission of the Bangladesh Bank. Only foreign exchange received from the donors / donor agencies to meet expenses of the project can be credited to these accounts. All expenses in foreign exchange as per relevant contract may be met from these accounts. These accounts should be closed as soon as the transactions relating to the project are concluded.
It will be in order for the ADs to issue cheque books to foreign currency account-holders.
5. Foreign nationals residing in Bangladesh are allowed to maintain and operate their foreign currency accounts abroad.
6. Foreign currency accounts may be opened in the names of resident Bangladesh nationals working with the foreign / international organizations operating in Bangladesh provided salary is paid in foreign currency. Such account may be credited only with the foreign currency portion of the salary and debited for all approved current transactions like cost of travel, education for children, treatment etc. Foreign currency accounts may also be credited with consultancy fees/honoraria received in foreign currency by the above mentioned category of residents, debits to such accounts being subject to same conditions as mentioned above.
7. In terms of Government Notification No. 1(8)-EF/58 dated 20th August, 1958 issued under Section 9 of the FER Act, all citizens of Bangladesh and other persons residing in Bangladesh continuously for six months or more who became owner of any foreign exchange whether held in Bangladesh or abroad are required to sell such foreign exchange to an AD within one month of the date of acquisition by them of such foreign exchange. This provision of repatriation of foreign exchange will not, however, apply to the following cases viz.
(i) Foreign exchange held abroad by foreign diplomats and foreign nationals employed in Embassies and Missions of foreign countries in Bangladesh.
(ii) Foreign exchange held abroad by foreign nationals or foreign business houses, except to the extent representing earnings abroad in respect of business conducted in Bangladesh or services rendered while in Bangladesh.
(iii) Foreign exchange held by Bangladesh nationals in accounts abroad which were opened and credited while the account holder were working abroad as resident outside Bangladesh.
(iv) Foreign contractors or consultants working in Bangladesh under contract with any Government Department or Public Sector agency or in a project under any loan, credit or grant, where the relevant contract provides for payment of their fees and emoluments party or entirely in foreign exchange abroad.
(v) Expatriate employees of foreign contractors or consultants as mentioned in sub-para (iv) above where the terms of their employment provide for payment of their salaries partly or entirely in foreign exchange abroad.
(vi) Foreign nationals stationed in Bangladesh as employees of foreign concerns situated abroad and receiving part of their emoluments in Bangladesh for subsistence and the balance abroad for meeting other expenses, including maintenance of their families, will not also be required to repatriate the portion of their emoluments received abroad.
Besides the above mentioned exemptions from repatriation requirement, there are exemptions from surrender (encashment) requirement in respect of (i) portion of repatriated export proceeds that is allowed to be credited to the exporters retention quota account, (ii) foreign exchange brought in at the time of return from abroad that can be credited to RFCD account and (iii) upto US$ 5000 brought in undeclared at the time of return from abroad that can be retained at hand.
For the purposes of the aforesaid Notification the term “residents in Bangladesh” excludes citizens of Bangladesh in foreign countries so long as they stay outside Bangladesh but includes foreign nationals who reside continuously in Bangladesh for six months or more.
8. Payments in foreign currency by foreign nationals residing in Bangladesh to or on behalf of residents of Bangladesh whether Bangladesh or foreign nationals are prohibited except to a firm, like a gift shop or an establishment, like a hotel, holding a valid Authorized Money changer’s license. Foreign nationals should not, therefore, directly or indirectly, make foreign currency available to the residents or to other persons on their behalf against payment in Taka. Such payments are prohibited even from their foreign currency accounts which they are permitted to maintain and operate from Bangladesh.
i. Authorized dealer may open F.C. A/C in the name of followings without prior approval from Bangladesh Bank.
(a) Bangladeshis residing / working / earning abroad including self-employed. Account may be in US Dollar, Pound Sterling, Euro, Detached Mark or Japanese Yen.
(b) Foreign Nationals residing abroad / in Bangladesh, foreign firms registered abroad & operating in Bangladesh / abroad.
(c) Foreign Missions & their expatriate employees.
ii. Foreign Exchange earned through business done or services rendered in Bangladesh cannot be put into the account.
iii. Credits to a foreign currency account may be made against inward remittance of foreign exchange in any form or transfer from another F.C. account or non-resident Taka accounts in banks abroad.
Payment may be made freely abroad / local disbursement also be made freely in Taka from the balance of F.C. account.
AD branch can pay profit on such accounts provided the accounts are maintained in the form of term deposits for a minimum period of 90 days.
Papers / Documents required for opening FCD A/C.
i.Accounts opening form duly filled in
ii.Specimen signature cards (Both A/C holder and Nominee)
iii.Declaration (as per specification)
iv.Photocopy of First 7 pages of Passport (Original for Verification)
v.Letter of Authority (For nominee)
vi.Photo copy employment contract / self employed document.
vii.3 passport size photograph of nominee attested by A/C Holder.
Any person intending to open FC A/C from abroad, must send all the aforesaid papers (except original passport) duly attested by authorized officers of nearest Bangladesh Mission or Foreign correspondent of Authorized Dealer.
Salient Features of F.C.Account
i. May be opened without initial deposit.
ii. Remains operative even if not operated for a long time.
iii. Bears no interest.
i. Operation generally transfers in nature.
ii. Both account holder and nominee can operate.
iii. Cheque books or withdrawal form can be used.
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