Offshore banking units can place fund in DBUs

Offshore banking units (OBUs) of a bank may place its funds into its domestic banking unit (DBUs) for six months with a limit not exceeding 25 per cent of total regulatory capital of the bank.

Earlier no placement facility could be availed.

For the new facility, the amount of foreign currency in the DBUs of a bank will increase, said a high official of Bangladesh Bank. All the funds of offshore banks are in foreign currency.

The relaxation shall remain valid for placement of funds to DBUs till 31 December 2002, said a circular issued by the Foreign Exchange Investment Department (FEID) of the central bank.

Offshore Banking Unit mainly deals with non-resident Bangladeshi citizens, maintaining exclusively foreign currency transactions, can borrow and lend in foreign currency with any local and global banks.

According to the policy, offshore banking operation/transactions with fully foreign-owned enterprises in EPZs, PEPZs, EZs and hi-tech parks shall include nothing other than accepting deposits, making short term loans/advances and investments, discounting bills, negotiating bills, issuing letter of credit and guarantee.

With prior permission from the FEID of Bangladesh Bank, banks, as part of their offshore banking, may give loans/advances to the enterprises other than fully foreign-owned ones in EPZs, PEPZs, EZs and hi-tech parks.