Bangladesh Bank Issues New Rules for Dollar Transactions and Gold Imports

Bangladesh Bank has consolidated regulations on foreign currency transactions, money changer licences, limited foreign exchange operations and gold import approvals into a single circular. The new guidelines cap the fee for endorsing foreign currency on passports at Tk 300. They also specify limits on dollar sales to travellers, foreign currency holdings by money changers, licence renewal requirements and fees, and rules for gold imports.

The circular was issued on Saturday (October 17). It brings together rules for issuing and renewing licences for authorised dealers, money changers and gold dealers.

Previous instructions covered by the circular will cease to apply once it takes effect. The circular will remain valid for one year from its date of issuance. Any amendments or clarifications issued during that period must be read alongside it.

Banks must submit five years of transaction data

Authorised dealer (AD) licences for foreign exchange transactions in Bangladesh are generally issued to scheduled banks. A bank seeking a licence for a branch must apply to Bangladesh Bank’s Foreign Exchange Policy Department-2 through its head office.

The application must include a declaration of compliance with foreign exchange risk management guidelines and relevant Bangladesh Bank instructions. Banks must also provide five years of data on imports, exports, non-funded exposure, related liabilities and remittances handled by all their authorised dealer branches. The number and value of transactions must be presented year by year.

Applicants must report outstanding bills of entry after import bills have been settled, along with the corresponding foreign currency amounts. They must also submit a feasibility study explaining the need for a licence and the business prospects of the proposed branch, details of qualified and experienced staff, a certified copy of the branch licence issued by Bangladesh Bank’s Banking Regulation and Policy Department-1, and the latest audited financial statements.

Bangladesh Bank may cancel or withdraw a licence if a bank fails to perform its prescribed duties or comply with the Foreign Exchange Regulation Act, 1947, and related instructions. The bank must first be given a reasonable opportunity to explain its position.

Dollar sales capped at $3,000 per transaction

Money changers may purchase foreign currency notes and coins from Bangladeshi and foreign nationals arriving from abroad or returning from overseas. They must issue sellers a encashment certificate in the prescribed format for each purchase.

Money changers may sell up to $3,000 in foreign currency notes and coins at a time to Bangladeshi citizens travelling abroad under their personal travel quota. Other freely convertible currencies may be sold against the unused portion of the annual travel entitlement.

A valid ticket is required for sales of up to $200 or its equivalent in another foreign currency. A valid visa must also be presented for larger amounts, where applicable.

Foreign tourists may exchange unused taka for up to $500 or its equivalent in foreign currency when leaving Bangladesh. They must submit an encashment certificate issued by any licensed money changer. The new transaction must be recorded on the original certificate, and a copy must be retained.

Before selling foreign currency for overseas travel, money changers must verify whether the customer completed the previous trip or properly encashed the currency previously purchased. Each transaction must be recorded in the passport and, for air travel, on the ticket, with the authorised official’s seal and signature. Copies of relevant passport pages, visas and foreign currency endorsement pages must be retained for at least five years.

Strict conditions for money changer businesses

Money changing must be the institution’s sole business. No branch office may be opened, and no other commercial activity may be conducted at the licensed premises.

The fee for endorsing foreign currency on a passport cannot exceed Tk 300. The fee must be displayed prominently, customers must receive written receipts, and records of fees collected must be maintained.

Licence renewal requires a minimum annual foreign exchange transaction volume in the preceding year: $500,000 or its equivalent in Dhaka and Chittagong city corporation areas, and $350,000 in other areas. Applications that fail to meet these thresholds will be considered ineligible.

Renewal applications must include an updated trade licence, tax payment certificate, proof of value-added tax payment, membership certificate from the relevant association and a statement of assets and liabilities submitted to the income tax authorities.

Sole proprietorships and partnerships must have minimum net assets of Tk 1 million. Companies limited by shares must have paid-up capital of at least Tk 10 million, as shown in audited accounts. The non-refundable renewal fee is Tk 10,000.

Prior Bangladesh Bank approval is also required to change a money changer’s business address, convert a sole proprietorship or partnership into a company limited by shares, or transfer ownership. Breaches of licence conditions may lead to cancellation or other regulatory action.

Oversight of limited money changer licences

Bank branches and booths, along with other eligible institutions, may receive licences for limited foreign exchange operations. These institutions may accept foreign currency notes from holders of foreign passports as payment for goods and services. The money must be converted into taka through an authorised dealer bank by the next working day. However, institutions may retain up to $1,000 or its equivalent in approved foreign currency to facilitate transactions.

Bank branches and booths do not need to renew these licences. Licences issued to other institutions are valid for two years, and renewal applications must be submitted at least two months before expiry. Required documents include an updated trade licence, income tax papers, foreign exchange transaction records for the previous year and other relevant documents. The renewal fee is Tk 10,000.

Such institutions must display licence information in Bangla and English, along with daily exchange rates, in a prominent place. They must comply with laws and Bangladesh Financial Intelligence Unit instructions on preventing money laundering and terrorist financing. Bangladesh Bank may conduct on-site inspections and cancel licences for non-compliance.

Prior approval required for every gold import

Authorised dealer banks and other eligible institutions may receive authorised gold dealer (AGD) licences to import gold bars and jewellery. Licences are valid for two years. Renewal applications must be submitted at least three months before expiry, with a fee of Tk 200,000.

Holding a gold dealer licence does not permit unrestricted imports. Separate prior approval from Bangladesh Bank is required for every import of gold bars or jewellery. Applications must detail the import requirement and the amount of foreign currency needed for payment. Import Policy Orders and other applicable laws must also be followed.

Gold dealer licences are non-transferable. Prior approval is required to change business premises, and no other commercial activity is permitted at the licensed premises. Separate applicable instructions must be followed when importing gold bars under gold jewellery export projects.

Approval for importing gold refinery raw materials

Separate provisions cover importers seeking to bring in unrefined gold ore or partially refined gold for processing. Applicants must submit approval from the Ministry of Commerce, an updated trade licence, tax identification number, VAT registration, business profile, a bank solvency report and information about the owners, directors and responsible officers.

A non-refundable authorisation fee of Tk 3 million must accompany the application. The authorisation is valid for five years. Renewal applications must be submitted at least three months before expiry, with a fee of Tk 500,000.

Bangladesh Bank may assess the applicant’s infrastructure, security, communications facilities and staffing capacity. It may also revoke the authorisation if the conditions are not met.

General foreign currency sales capped at $5,000 per person per trip

The circular also consolidates general rules on buying and selling foreign currency notes and coins. Such transactions are prohibited without authorisation. Authorised dealer banks may sell foreign currency to other authorised dealers and customers in accordance with Bangladesh Bank instructions. Approval is also required to send surplus notes and coins abroad and deposit the proceeds in the relevant foreign currency account.

Bangladeshi citizens travelling abroad may receive up to $5,000 in foreign currency notes and coins per person per trip for personal travel, business, medical treatment, education or other authorised purposes. The remaining entitlement may be provided in other freely convertible currencies.

The same limit applies to dollar notes issued against balances in personal foreign currency accounts, resident foreign currency deposit accounts, exporters’ retention quota accounts and eligible taka accounts. Other rules applicable to each category must also be followed.

The consolidated circular brings together licensing and renewal procedures, transaction limits, record-keeping, reporting requirements and oversight rules for authorised dealers, money changers, limited money changers and gold importers. It will remain effective for one year from the date of issuance.