Bangladeshi banks taking the plunge into commencing offshore operations are offering lucrative benefits for non-resident Bangladeshis (NRBs) to deposit their earnings in foreign exchange (mainly dollar) with them.
Bangladesh Bank (BB) has given verbal directives to the scheduled banks in this regard to enhance the stock of US dollars, a shortage of which is hampering the economy in various ways.
In line with this instruction, banks have started an extra effort to collect foreign currency, especially the US dollar from sophisticated and rich families who may be settled abroad but maintain ties with Bangladesh, through offshore banking.
“Full government guarantee is being given on the deposit along with higher interest rate as an incentive,” said Selim RF Hussain, Chairman of the Association of Bankers Bangladesh (ABB).
“Again no tax will be charged. If banks give better interest rates, provide better services, we hope a good quantity of dollars would be deposited,” he said.
He said, "We want Bangladeshis who are abroad to bring their foreign currency to Bangladesh legally. We will also give them a good interest rate.”
India has become very successful in this sector in the last 5-7 years. Many countries including the Philippines and Thailand have done it well, he pointed out.
“We have also launched now if all banks understand it well, we will get good results if we can promote it in various ways including product development and marketing,” said Hussain, also the managing director of BRAC Bank.
He said, "Many banks have started promotion. Dollar Savings Abroad is another client site. They are not the ones from whom we get remittances. These are those who are a little higher level, doctors, engineers, lawyers.”
He said, “We are trying to bring dollars from those who are professionals.”
“Many people of Bangladesh are now citizens of other rich countries. We will also bring foreign exchange from them. Because we are giving good interest rates,” he pointed out.
The ABB chairman pointed to the City Bank as the early leader in the entire sector in this regard, having already raked in some $30-40 million. But he insists these are still early days.
"It's just getting started. Gradually everyone will start (offshore banking)," said Hussain.