Bangladesh Bank Issues New Guidelines for Foreign Currency Accounts and Transactions

Bangladesh Bank has issued a comprehensive set of consolidated guidelines aimed at simplifying foreign currency account operations, import-export transactions, and foreign direct investment. Under the new policy framework, foreign investors can now invest in open-ended mutual funds alongside capital market securities. Non-resident Bangladeshis (NRBs) will be able to open Non-Resident Investors Taka Accounts (NITA) online, while domestic businesses serving foreign tourists via international cards can retain up to 15 percent of their earnings in foreign currency.

The Foreign Exchange Policy Department-2 (FEPD-2) of the central bank issued the master circular on Thursday (November 12). The circular consolidates rules governing account opening, operation, deposit, withdrawal, and remittance for foreign nationals and non-residents, updating previous regulations under the Foreign Exchange Regulation Act, 1947. The guidelines will remain effective for one year.

Under the new directive, merchants such as hotels, resorts, restaurants, and retail outlets accepting international cards or approved digital payment systems can retain up to 15 percent of total foreign currency revenues in foreign currency accounts. The remaining 85 percent must be encashed into local currency (BDT). Retained funds can be utilized for legitimate current account foreign obligations, subject to proper tax and VAT compliance.

To facilitate investment by NRBs, banks are instructed to launch interactive online platforms for opening NITA accounts remotely. Banks must publish procedure details on their official websites, enabling applicants to submit digital application forms and supporting documents. Once verified, account holders will receive security PINs to operate their accounts online from abroad, adhering strictly to KYC, anti-money laundering (AML), and counter-terrorist financing (CFT) standards.

To boost foreign portfolio investment, NITA account funds can now be used to purchase units of open-ended mutual funds approved by the Bangladesh Securities and Exchange Commission (BSEC), extending beyond traditional listed stocks and securities. Fund issuers must notify Bangladesh Bank within 14 days of unit issuance to foreign investors. Dividends earned can be credited back to NITA accounts post-tax deduction. In addition, Bangladeshi expatriates working abroad can open foreign currency accounts without an initial minimum deposit, allowing them to manage funds independently or assign an authorized representative.

Returning expatriates declaring cash over USD 10,000 at customs may deposit the funds into foreign currency accounts. Funds from these accounts can be remitted abroad or converted for domestic expenditure.
The framework also covers Resident Foreign Currency Deposit (RFCD) accounts, allowing residents to use foreign funds for travel, education, healthcare, or international payment card transactions. Furthermore, authorized dealer banks can open designated foreign currency accounts for borrowers to manage approved foreign loan proceeds for imports, project costs, and local procurement.

Quarterly utilization reports of loan proceeds must be submitted to the central bank. Accounts are generally closed once loan funds are fully disbursed, unless loan terms mandate holding balances for debt servicing.
The master circular incorporates updated rules for Non-Resident Foreign Currency Deposit (NFCD) accounts, foreign direct investment capital accounts, foreign bank vostro accounts, and foreign contractor accounts.
NFCD accounts offer fixed deposits ranging from 1 to 12 months with a minimum initial deposit of USD 1,000 for NRBs and USD 25,000 for foreign entities and 100% foreign-owned firms. Central bank directives stress that banks must maintain full compliance with KYC, AML, CFT, and reporting requirements throughout these transactions.