The government will initiate financial sector reforms, including in banks, to attract foreign investment in Bangladesh.
“And the reform move will cover also the banking sector in Bangladesh. Simultaneously, a big opportunity has also been created,” an official says.
In the context of Covid-19 pandemic, the existing regulations of the banking sector are being simplified with the aim of creating environment conducive to foreign investment.
Besides, the process of opening ‘Foreign Current Account (FCA)’ will be made easier. It was decided to do so by reforming The Foreign Exchange Regulation Act.
At a recent meeting held at the Ministry of Finance with the aim of creating environment conducive to foreign investment in Bangladesh under the changed circumstances of COVID-19, seven decisions were made. The finance ministry has given necessary instructions to the departments concerned and agencies, including the central bank, to implement the decisions, finance ministry sources said on anonymity.
The decisions made at the meeting also include: Foreign investors can easily take money and dividends in their own country, and to take necessary steps to make it easier to send remittances to expatriates.
Bangladesh Bank was given the responsibility to implement these two decisions.
Apart from this, specific proposals have been sought from the concerned ministries, departments and agencies on what kind of changes and additions can be made to the existing laws and regulations of the banking sector.
The proposal is asked to be sent to the finance ministry soon.
Besides, it was decided to 'time bound' the issue of providing services to foreign investors under 'Ease of Doing Business'.
The decision further said that Bangladesh Bank will issue timely instructions in this regard by simplifying the services of the banking sector keeping in view the issues of the competing countries.
Besides, the central bank will also supervise its implementation.
The latest decision states that the Foreign Exchange Regulation Act-1974 (as amended in 2015) has been consulted on the draft law to translate it into Bengali and make it timely.
This opinion is said to be sent to the Department of Financial Institutions quickly.
In order to achieve double digit growth in the future, the amount of investment has to be increased to 40 percent of the GDP, but the current rate is 31.6 percent, according to the finance ministry.
The national savings-to-GDP ratio is less than 30 percent.
And there is no chance of increasing the existing rate of savings soon.
As a result, there is no alternative but to increase it by attracting foreign investment.
To this end, initiatives have been taken to facilitate foreign investment and repatriation of dividends.
Former executive chairman of the Bangladesh Investment Development Authority (BIDA) KaziAminul Islam said the investment risk needs to be reduced first to attract foreign investors to invest here.
Besides, we have to improve further Ease of Doing Business and the news should reach foreign investors - investing in Bangladesh is easier, not through than before, he mentioned.
In addition, the infrastructure deficit must be filled, he added.
Former World Bank lead economist DrZahid Hossain said, “Bangladesh needs to remove policy complexity and infrastructure crisis to attract foreign investment.”
Besides, a clear message has been sent to foreign investors as to how they will get benefit out of invest here, he mentioned.
Executive Chairman of Bangladesh Economic Zones Authority, Paban Chowdhury said many investors from China, Japan and European countries are keen to invest in the economic zones which proves that Bangladesh has become a lucrative place for foreign investors.
He said, “We have been preparing our new economic zones and investors are waiting to invest. The foreign investment will increase to a great extent once we prepare these zones.”