Retain remittances in foreign currencies

The Bangladesh Bank (BB) has instructed scheduled banks to inform individual remittance recipients about the option of keeping their money in foreign currencies.

Banks from now on should not convert foreign remittances into taka without the recipient’s permission, said a circular issued by BB’s Foreign Exchange Policy Department on Monday.

Banks are currently converting all inbound remittances into taka without authorisation which is putting local service providers earning in foreign currencies in various difficulties, according to business insiders.

For example, making payments overseas becomes difficult if foreign currencies are not retained, they added.

As such, the circular is allowing remittance recipients more control over the decision to retain their money in foreign currencies, they also added.

The circular stated presently 70 per cent of inward remittances against ICT services can be retained in foreign currency accounts known as Exporter’s Retention Quota (ERQ) Accounts, and 60 per cent against other services.

Banks must inform their clients about the benefits of the aforementioned provision in order to address a variety of challenges that arise from not being able to keep inward remittances in foreign currencies, the circular added.