To widen the scope for repatriation of income against service exports, the central bank has made it easier for the service sector to bring revenue to the country.
From now on, freelancers and service providers will be able to maintain their accounts with any licensed payment service provider. Bangladesh Bank (BB) has issued a circular in this regard on Monday.
Authorized Dealers (ADs) are allowed to repatriate remittances through Online Payment Gateway Service Providers (OPGSPs) against small value service exports for which ADs are required to enter into standing arrangements with internationally recognized OPGSPs and maintain separate nostro collection account for each OPGSP.
Service exporters availing of this facility are, among others, allowed to open notional accounts with only those OPGSPs having arrangements with ADs in Bangladesh.
A nostro account refers to an account that a bank holds in a foreign currency in another bank. Nostros, a term derived from the Latin word for "ours," are frequently used to facilitate foreign exchange and trade transactions.
ADs may allow their service exporter-customers to enter into arrangements, including maintenance of merchant accounts, with international market places/platforms.
In addition to such accounts, service exporters may maintain notional accounts, without limiting to licensed OPGSPs, with internationally reputed payment service aggregators, payment facilitators, digital wallets or other legitimate payment systems licensed by the regulatory authorities concerned.
Accordingly, ADs shall facilitate repatriation of service income deposited in their nostro accounts by international market places or platforms including eligible foreign payment operators, regardless of having arrangements and maintaining separate nostro collection accounts.
While on receipt of inward remittances in nostro accounts on account of service income by way of international market places or platforms or eligible foreign payment operators, ADs shall observe following procedures: ADs shall credit the receipts in equivalent local currency to respective bank accounts, or arrange to transfer the same to digital wallets maintained with Mobile Financial Service Providers licensed by Bangladesh Bank.
In case exporters’ ADs are different, at the option of service exporters for maintaining ERQ accounts, ADs repatriating service income shall transfer the repatriated fund through nostro or clearing accounts of Bangladesh Bank to concerned ADs in invoicing currency.
For such transfer, beneficiary ADs will follow reporting routine to Bangladesh Bank. Regulations on deductions of applicable taxes and payment thereof need to be complied with.
ERQ account is the portion of export earnings that an exporter saves as foreign currency. With this account balance, exporters could promote their businesses abroad, open liaison office(s), and cover import cost of raw materials and machinery without needing prior approval of Bangladesh Bank.
Service exporters can operate no accounts abroad for store of value other than merchant or notional accounts. At the option of international market places or platforms and eligible foreign payment operators, ADs may maintain CFT compliant foreign currency accounts and non-resident Taka accounts in their names.
Guidelines for Foreign Exchange Transactions (GFET) for payments on account of service income by debit to the accounts, subject to observance of relevant instructions as noted at 3 above.
The objective of KYC or AML or Combating of Financing of Terrorism (CFT) guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities.
As usual, ADs shall observe reporting routine to Bangladesh Bank with appropriate codification and comply with the relevant foreign exchange regulations, CFT norms and any other relevant laws or regulations in force.