Central bank relaxes rules to boost remittance inflow

The Bangladesh Bank has relaxed the rule for banks making drawing agreements with exchange houses in other countries, in a bid to boost the inflow of remittance.

The central bank’s Foreign Exchange Policy Department (FEPD) issued a circular in this regard on Wednesday, allowing banks to make such agreements without prior permission from the regulator.

Under this context, the banks will have to make post-facto reports to the central bank with detailed information of the drawing agreements, the circular read.

The central bank also waived the requirement of letters of references or certificates from Bangladesh’s embassies or high commissions in other countries.

In such cases, banks need to be satisfied on the basis of licenses issued by competent authorities favouring relevant exchange houses, and conduct extended due diligence.

Banks have been making drawing agreements with exchange houses abroad as per Bangladesh Bank’s policy guidelines of 2007. The new regulations can help facilitate repatriation of wage remittances, according to an official of the central bank.

Wage earners’ remittance inflows declined 15.12 per cent to $21.03 billion. However, remittance income had increased 12 per cent to $2.09 billion this July, according to Bangladesh Bank data.