On Feb. 22, BNG CB issued circular on offshore banking operations.
BNG CB published circular letter outlining the offshore banking operations of banks.
Overview of Circular Letter
Banks may discount/purchase accepted usance/deferred export bills against direct and deemed product exports produced in Bangladesh, subject to instruction compliance.
May also extend early payment facilities for export under open account credit terms.
As per FE circular no. 25, Jun. 30, 2020, and subsequent amendments/instructions.
Mar. 2022 Allocation Code
On Mar. 21, 2022, BNG CB updated on allocation of code for offshore banking unit (OBU) of banking companies to guide the proper completion of reporting activities.
Jul. 2022 Fund Placement
On Jul. 14, 2022, BNG CB issued a circular allowing offshore banking operation to place fund to their domestic banking units (DBUs) for 6 months; until Dec. 31, 2022.
Subject to a limit not exceeding 25% of total regulatory capital of bank to settle import payment of capital machinery, industrial raw materials and imports by government.
Jan. 2023 Fund Placement Extension
On Jan. 4, 2023, BNG CB has issued a time extension for placement of funds from offshore banking operations (OBOs) to domestic banking units to Jun. 30, 2023.
All other instructions of the previous circular letter shall remain unchanged.
Apr. 2023 Additional Extension
On Apr. 9, 2023, BNG CB provided a time extension for placement of funds from offshore banking operations (OBOs) to domestic banking units to Dec. 31, 2023.
The decision aims to bring further flexibility for external transactions for DBUs.
DBUs may receive funds from any OBOs up to 40% of their total regulatory capital to settle permissible payment obligations as per prevailing foreign exchange regulations.
Dec. 2023 Extension
On Dec. 28, 2023, BNG CB provided a time extension for placement of funds from offshore banking operations (OBOs) to domestic banking units to Jun. 30, 2024.
All other instructions of the previous circular letter shall remain unchanged.
Document dated Dec. 28, 2023, received from BNG CB Dec. 31, summarized Jan. 4.
Jan. 2024 Fund Transfer
On Jan. 16, 2024, BNG CB issued circular on the restriction on fund transfer from domestic banking to offshore banking, which repeals the limit for the transfer of funds.
Specifically, the limit for the transfer of funds from domestic banking to offshore banking has been abolished in order to reduce the dependence on the banking sector.
Other instructions mentioned in BNG CB circular no 9/2021 shall remain unchanged.
The circular is effective immediately.
Feb. 2024 Relaxation of Regulation
On Feb. 29, 2024, BNG CB relaxed regulatory requirements in offshore banking operations; banks are no longer required to maintain cash reserve ratio with BNG CB.
OBOs are allowed to place funds to their DBUs without restrictions, enabling them to settle various import payments in accordance with foreign exchange rules, regulations.
Aug. 2024 Borrowing Limit
On Aug. 20, 2024, BNG CB decided to permit OBOs to borrow funds from their DBUs up to 30% of their regulatory capital, including any current outstanding amounts.
OBOs that currently have borrowings exceeding limit have to adjust by Dec. 31, 2024.
In Nov. 2024, BNG CB issued circular re offshore banking unit data, see #234902.
