Businesses can keep 15 percent of foreign card earnings in foreign currency accounts
Businesses can keep up to 15 percent of the foreign currency they earn from selling goods and services to foreign tourists. This applies to sales through internationally issued cards and other approved payment systems. They can keep this money in their own foreign currency (FC) accounts. They must convert the other 85 percent into Bangladeshi taka. Bangladesh Bank has given this chance to hotels, resorts, restaurants, shopping malls, retail outlets and other businesses.
Bangladesh Bank gave the instruction yesterday in a circular. The Foreign Exchange Policy Department 2 of the central bank issued it. The circular lets businesses keep a part of the foreign currency they earn from sales to foreign tourists through international cards and other approved payment systems.
The circular said the central bank took this decision to encourage the use of internationally issued cards and other approved payment systems. These systems are for selling goods and services to foreign visitors in Bangladesh. Businesses can keep the foreign currency from these sales in a foreign currency account. The account must be in the name of the business and open through an authorised dealer (AD) bank.
Hotels, resorts, restaurants, shopping malls, retail outlets and other businesses will get this chance. But the amount kept in the foreign currency account cannot go above 15 percent of the total foreign currency received. Businesses must convert the rest into Bangladeshi taka.
According to the instruction, businesses can use the reserved money to pay legal foreign currency dues under the current account. This includes payments through international cards. In this case, they must follow the second paragraph of the first part of the circular issued last month.
The circular also said the authorities must deduct the applicable tax and value added tax (VAT) properly and deposit them in the government treasury. AD banks must also make sure that these businesses have proper arrangements to accept payments through internationally issued cards and other approved payment systems.
Businesses must also follow the rules on know your customer (KYC), preventing money laundering and preventing terrorist financing. The circular told them to take proper care in these matters. It also told them to submit the required reports to Bangladesh Bank.
The circular creates a chance for businesses to keep a part of the foreign currency they earn from card sales to foreign tourists. But to use this facility, they must follow the 15 percent limit. They must also convert the rest into taka, use the money only in legal payments, and follow the rules on tax, VAT and preventing money laundering.
