Banks need no prior approval for internet import payments: BB

Banks will now be able to process payments for imported internet bandwidth and related services without prior approval from the Bangladesh Bank.

The Foreign Exchange Policy Department (FEPD) of the central bank issued a circular today, detailing the new rules, saying "banks can now independently assess and process these payments."

Talking to The Business Standard, a senior official of the central bank said, "Usually, import payments do not require advance approval from the central bank. Similarly, banks can now process payments for internet bandwidth and related services by verifying prescribed information on their own, which will increase both speed and accountability."

The previous regulation required banks to seek approval from Bangladesh Bank for each payment related to internet bandwidth imports. 

The updated circular, however, specifies that banks must adhere to certain guidelines, including obtaining applications that contain valid licences, agreements with relevant parties, regulatory approvals from the Bangladesh Telecommunication Regulatory Commission (BTRC) and other competent authorities, invoices, tax payment evidence or certificate of exemption issued by concerned tax authority, and an undertaking from the applicant for prompt repatriation in cases of excess remittance.

The circular also directs banks to ensure the authenticity of remittance requests by reviewing regulatory approvals, financial statements, and other documents.

"Banks shall obtain relevant documents along with audited statements of earnings, expenses, net position (surplus/deficit) pertaining to the payments. Audited statements should also include the collection amount originated from sales of imported bandwidth service," the circular read.

It also said banks must verify that funds for remittance are sourced from legitimate business operations, with required regulatory reporting fully met.