CH 13 137
CHAP T E R 1 3
S E CT I O N- I
PRIVATE FOREIGN CURRENCY ACCOUNTS
1. Opening of FC accounts with ADs in Bangladesh
(i) The ADs may without prior approval of the Bangladesh Bank open foreign currency accounts
in the names of (a) Bangladesh nationals residing abroad (b) foreign nationals residing abroad or
in Bangladesh and also foreign firms registered abroad and operating in Bangladesh or abroad
(c) Foreign missions and their expatriate employees. Bangladesh Bank may specially allow
opening of foreign currency accounts not covered by this general authorisation.
(ii) Foreign exchange earned through business done or services rendered in Bangladesh can not
be put into these accounts. Credits to a foreign currency account may be made against inward
remittance of foreign exchange in any form or transfer from another foreign currency account or
non-resident Taka accounts of banks abroad.
(iii) Payments may be made freely abroad from these foreign currency accounts to the extent of
balances lying therein. Local disbursements may also be made freely in Taka from such foreign
currency accounts.
(iv) No payment in foreign exchange may be made to or on behalf of any resident in Bangladesh out
of the foreign currency accounts opened as per the above arrangement. However, this restriction
will not apply in case of foreign diplomats and privileged persons or any other person or firm who
have specific authority from Bangladesh Bank to accept such payments. Bills of the local
contractors of the foreign missions in Bangladesh may also be settled in foreign currency from the
balances of the foreign currency accounts of such missions. In such cases the beneficiary of the bill
will have to encash the foreign currency with any AD within one month from the date of receipt.
(v) Any payment received in foreign exchange by the ADs on behalf of residents of Bangladesh
must not be retained in foreign exchange but must be converted into Taka unless the AD is
satisfied that the payee has the general/special permission of the Bangladesh Bank to retain the
foreign exchange.
(vi) The ADs maintaining foreign currency accounts under this authority can pay interest on such
accounts being maintained in the form of term deposits for the period of one/three/six/twelve
months at the prevailing Eurocurrency deposit rates. ADs may apply interest on prevailing
Eurocurrency deposit rates also on non-resident foreign currency accounts not specifically
maintained as term deposit, for balances not less than USD 1000(one thousand), Pound Sterling
500(five hundred) or equivalent in other currency lying in the accounts for one month or longer
period.
CH 13 138
2. FC Accounts of non-resident Bangladeshis
(i) Bangladesh nationals working and earning abroad including self employed Bangladeshi
migrants proceeding abroad on employment may open foreign currency accounts even without
initial deposits. They may operate the accounts themselves or nominate other persons in
Bangladesh for this purpose. The accounts can be opened in Pound Sterling, US Dollar, Euro or
Japanese Yen at the option of the prospective account holder and maintained as long as the
account holder desires. These accounts would ordinarily be fed from remittances by account
holders themselves but funds sent by other wage earners may also be placed to the credit of such
accounts. ADs may also raise credits to such accounts with the proceeds of convertible foreign
exchange viz. currency notes, travellers' cheques, drafts etc. brought into Bangladesh by the
account-holders while on temporary visit to Bangladesh provided such foreign exchange in excess
of USD 5000 (or its equivalent) has been duly declared by them to the Customs on Form 'FMJ' at
the time of their arrival. Foreign currency brought in by NRBs may be deposited to such FC
accounts through bank booths operating in airports as mentioned in Para 1(D), Chapter 6.
(ii) Payments may be made freely abroad from these foreign currency accounts to the extent of
balances lying therein. Local disbursements may also be made freely in Taka from such foreign
currency accounts. Funds lying to the credit of FC accounts of Bangladesh nationals can be utilised
for import of goods and commodities as per instructions issued by the CCI&E and Bangladesh Bank.
(iii) Interest on such accounts can be applied as mentioned in 1(vi) of this chapter.
3. FC Accounts of Diplomatic Bonded Warehouse
ADs may open foreign currency accounts in the names of the Diplomatic Bonded Warehouse
(duty free shops) licenced by the Custom Authorities on following conditions:
a) Convertible foreign currency (notes and coins, travellers' cheques, drafts, cheques or credit
card settlements) received only on account of sale of merchandise may be credited to these
accounts.
b) Foreign exchange may be remitted abroad only for the purpose of import of merchandise by
the bonded warehouse. For the same purpose foreign exchange may also be transferred from
such accounts to foreign currency accounts maintained with other ADs.
For meeting local expenses, foreign exchange from these accounts may be encashed freely at
current exchange rate. The requirement of encashment of at least 50 (fifty) percent of the gross
profit (sale price of merchandise minus purchase price of merchandise) of the Bonded
Warehouse in foreign exchange should be duly fulfilled.
c) Monthly statement of purchase, sale and foreign exchange transaction related thereto
alongwith bank certificate concerning encashment in Taka shall be submitted to the FEOD, Head
Office or other office of Bangladesh Bank in prescribed form (Appendix 5/3). Besides, ADs are
CH 13 139
required to report transactions through such FC accounts in Statement S-13 alongwith relevant
schedule [Chapter 2, Para 16(c), VoI. 2].
4. FC accounts of local and joint venture contracting firms
Foreign currency accounts in the names of local and joint venture contracting firms employed to
execute projects by foreign donors/international donor agencies may also be opened by the ADs
as per terms of the approved contract with the government authority without prior permission of
Bangladesh Bank. Only foreign exchange received from the donors/donor agencies to meet
expenses of the project can be credited to these accounts. All expenses in foreign exchange as per
relevant contract may be met from these accounts. These accounts should be closed as soon as
the transactions relating to the project are concluded.
Besides, ADs are required to report transactions through such FC accounts in Statement S-13
alongwith relevant schedule [Chapter 2, Para 16(c), VoI. 2].
5. Foreign nationals residing in Bangladesh are allowed to maintain and operate their foreign
currency accounts abroad.
6. FC Accounts of resident Bangladesh nationals working with foreign/international bodies
Foreign currency accounts may be opened in the names of resident Bangladesh nationals
working with the foreign/international organisations operating in Bangladesh provided their
salary is paid in foreign currency. Such account may be credited only with the foreign currency
portion of the salary and debited for all approved current transactions like cost of travel,
education for children, treatment etc. Local disbursements may also be made freely in Taka from
such foreign currency accounts. Foreign currency accounts may also be credited with
consultancy fees/honoraria received in foreign currency by the above mentioned category of
residents, debits to such accounts being subject to same conditions as mentioned above. Besides,
ADs are required to report transactions through such FC accounts in Statement S-13 alongwith
relevant schedule [Chapter 2, Para 16(c), VoI. 2].
7. It will be in order for the ADs to issue cheque books to foreign currency account-holders.
8. In terms of Government Notification No. 1(8)-EF/58 dated 20th August, 1958 (Appendix 2/8),
issued under Section 9 of the FER Act, 1947 all citizens of Bangladesh and other persons
residing in Bangladesh continuously for six months or more who became owner of any foreign
exchange whether held in Bangladesh or abroad are required to sell such foreign exchange to an
AD within one month of the date of acquisition by them of such foreign exchange. This
provision of repatriation of foreign exchange will not, however, apply to the following cases viz:
(i) Foreign exchange held abroad by foreign diplomats and foreign nationals employed in
Embassies and Missions of foreign countries in Bangladesh.
CH 13 140
(ii) Foreign exchange held abroad by foreign nationals or foreign business houses, except to the
extent representing earnings abroad in respect of business conducted in Bangladesh or services
rendered while in Bangladesh.
(iii) Foreign exchange held by Bangladesh nationals in accounts abroad which were opened and
credited while the account holders were working abroad as resident outside Bangladesh.
(iv) Foreign contractors or consultants working in Bangladesh under contract with any
government department or public sector agency or in a project under any loan, credit or grant,
where the relevant contract provides for payment of their fees and emoluments partly or entirely
in foreign exchange abroad.
(v) Expatriate employees of foreign contractors or consultants as mentioned in sub-para (iv)
above where the terms of their employment provide for payment of their salaries partly or
entirely in foreign exchange abroad.
(vi) Foreign nationals stationed in Bangladesh as employees of foreign concerns situated abroad
and receiving part of their emoluments in Bangladesh for subsistence and the balance abroad for
meeting other expenses, including maintenance of their families, will not also be required to
repatriate the portion of their emoluments received abroad.
Besides the above mentioned exemptions from repatriation requirement, there are exemptions
from surrender (encashment) requirement in respect of (i) portion of repatriated export proceeds
that is allowed to be credited to the exporters retention quota account (Please see Chapter 13,
Section -IV), (ii) foreign exchange brought in at the time of return from abroad that can be
credited to RFCD account (Chapter 13, Section-III) and (iii) upto USD 5000(five thousand)
brought in undeclared at the time of return from abroad that can be retained at hand (Chapter 6).
For the purposes of the aforesaid Notification the term "residents in Bangladesh" excludes
citizens of Bangladesh in foreign countries so long as they stay outside Bangladesh but includes
foreign nationals who reside continuously in Bangladesh for six months or more.
9. Payments by foreign nationals in foreign currencies
Payments in foreign currency by foreign nationals residing in Bangladesh to or on behalf of
residents of Bangladesh whether Bangladeshis or foreign nationals are prohibited except to a
firm like a gift shop or an establishment like a hotel holding a valid authorised money changer's
licence. Foreign nationals should not, therefore, directly or indirectly, make foreign currency
available to the residents or to other persons on their behalf against payment in Taka. Such
payments are prohibited even from their foreign currency accounts which they are permitted to
maintain and operate from Bangladesh.