Banks must take customers’ approval to convert remittances into taka

From now on, commercial banks have to take customers' permission to convert remittances into taka.

At the same time, the banks will instruct customers to keep remittances in foreign currency instead of converting them into taka and make payments with that currency, said the Bangladesh Bank in a circular on Monday.

According to the central bank's foreign exchange guideline, software, data entry and processing and other ICT related service exporters will be able to keep 70% foreign currency of their export income in their exporter's retention quota (ERQ) account. Other exporters will be able to keep 60% of their net export income in their ERQ accounts.

The Bangladesh Bank said exporters will be able to pay the cost of importing raw materials or other goods for their own company or its sister concerns and repay approved foreign loans with the foreign currency in the ERQ accounts. The money in this account can also be used for personal purposes.

Currently, exporters are getting around Tk87.5 per dollar from the banks for converting their remittances, while they have to buy dollars from the banks at Tk95 to import raw materials.

As a result of this policy of the Bangladesh Bank, exporters do not have to buy dollars separately to import raw materials. They will be able to meet the import cost with the foreign currency they earn by exporting and will not have to spend extra to buy dollars.

A senior official of the Bangladesh Bank told The Business Standard that the policy of keeping exporters' foreign currency earnings in ERQ accounts has been in place for a long time, but many did not know about it.

Demand for dollars has grown significantly, while there is a crisis of it in the country. In this situation, the issue of keeping remittances in foreign currencies in ERQ accounts was reminded again through circular, he said.