Bangladesh Bank (BB) has allowed members of the e-Commerce Association of Bangladesh (e-CAB) to send $10,000 a year abroad to foreign companies such as Facebook and YouTube, without its prior permission.
e-CAB members now can send the money through banks and international credit or prepaid cards. By card, the maximum of $10,000 can be sent in five $2,000 installments, said an official of BB.
Highly appreciating BB's move, e-CAB members said it will facilitate e-commerce and encourage new entrepreneurs in the country.
In the case of remittance, authorised dealer banks (AD) have to comply with foreign exchange transaction regulations, value-added tax (VAT) deduction and deposit, and e-CAB recommendations, said the central bank.
"e-CAB members have been given the opportunity to send the logical expenses of their current accounts abroad," said the BB.
However, in a recent circular of central bank stipulates that remittances by card and under the conventional banking system may not exceed $10,000 under any circumstances.
Talking to Bangladesh Post, general secretary of e-CAB Muhammad Abdul Wahed Tomal said that e-commerce companies have to spend much of their money on digital marketing, done mainly on Facebook and YouTube.
In addition to the maintenance of the websites, they have to send fees for foreign consultancy, he added.
Earlier there were no separate instructions from BB on sending these fees, he said, adding that then it had to be sent against the travel quota, which created various complications.
"Now the convenience of sending up to $10,000 without precise directions and approval from the central bank has made business easier. This facility will encourage e-CAB members and draw the interest of new entrepreneurs," he added.
BB spokesperson Serajul Islam said the foreign transaction system is being updated in a timely manner and the remittance facility will ease e-commerce business activities. e-CAB members will now be able to send $ 10, 000 abroad annually and it will facilitate e-commerce, he added.
The AD banks may issue refillable international credit/pre-paid card favouring a nominated official of eligible firm with US$ 2,000 or equivalent, according to the notification.
The BB restricted payments of royalty, technical knowledge/technical know-how fee, technical assistance fee and franchise fee under the limit, according to the officials.
As per the notification, outward remittance for such expenses would be guided by the guidelines issued by The Bangladesh Investment Development Authority (BIDA).
The AD banks have been asked to comply with relevant foreign exchange regulations, deduction and payments of applicable taxes at sources, VAT and other levies, recommendation from e-CAB, etc.
According to e-CAB, the sector sees about Tk 700 crore in transactions every month.
e-CAB has 700 members involved in e-commerce. It is working with the Bangladesh Post Office and the a2i programme of the Prime Minister's Office, to take e-commerce products and services to people across the country.