Understanding foreign currency accounts | The Daily Star
12:00 AM, February 12, 2019 / LAST MODIFIED: 12:00 AM, February 12, 2019

Banking tips

Understanding foreign currency accounts

As Bangladeshi residents and citizens, we are often in requirement of foreign currency for travel and to remit outside of our country. The more we become global, the more is the necessity of dealing with foreign currency and Foreign Currency (FC) account. Now, an FC account has to conform to the regulations of Bangladesh Bank (BB). BB prescribes quite a few kinds of FC accounts. Chapter 13 of the Foreign Exchange Transactions (GFET) 2018, Vol 1 expands on it.

Any branch of a bank which has an authorised dealer license can open an FC account for its eligible customers. These accounts can be maintained in Pound Sterling, US Dollar, Euro or Japanese Yen. Firstly, we will discuss about an FC account maintained by non-resident Bangladeshis or NRBs. This FC account can only receive foreign currency through inward remittance and withdrawal from it will be in cash in BDT. The FC fund in the account can be remitted in foreign currency outside the country. Funds sent by other wage earners, foreign currency notes, FC drafts, can be credited into these accounts, provided they are of value of US 5,000 dollars or equivalent. Any amount exceeding that need to be accompanied by an FMJ declaration form. Any payment to a resident Bangladeshi in foreign currency from this account is prohibited. The individual's bank can also issue cheque book and debit card against this FC account. Interested parties can maintain foreign currency in the form of Fixed Deposit, called Non-Resident Foreign Currency Deposit (NFCD) account. As the name suggests, these accounts can earn interest.

FC accounts can be also maintained by Bangladeshi nationals working in foreign/international organisations, provided their salaries are paid in foreign currency. For normal withdrawal, it will be in the form of BDT, however, expenses for travel, children's education and treatment abroad can be met from this account. Consultancy fees or honorarium in foreign exchange can be fed into this account.

Bangladeshis can also open with their AD an RFCD (Resident Foreign Currency Deposit) account. This account can be opened with the residual sum brought in from a travel abroad. The maximum amount is US 5000 dollars, and any amount exceeding that has to be declared in FMJ Form. These accounts may be opened in US Dollar, Pound Sterling, Euro, or Japanese Yen. Funds therein are freely remittable. Also possible are foreign currency endorsement against travel. While opening this account, the individual has to declare that the FC is not a receipt against export of goods or services from Bangladesh, and not a commission due from abroad, arising from business deal in Bangladesh. The bank can also issue debit card against an RFCD account.

I often come across suggestions on how to remit abroad proceeds from selling properties. The remittance of these funds is only allowed by seeking permission from Bangladesh Bank. Interested parties have to request for permission through their bank. Only their bank can officiate on their behalf for seeking this permission. Individuals cannot directly approach Bangladesh Bank. The application, which will be processed by the individual's bank, can illustrate on the need to remit the fund and reasons why the property was sold off. One of the reasons could be migration to another country, and therefore, vacating the rights to the property.

For our inquisitive readers, I would like to invite them to know about these regulations in detail from their banker or the following website.

https://www.bb.org.bd/aboutus/regulationguideline/foreignexchange/fegvol...

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