BB withdraws interest rate ceiling for NFCD accounts
The Foreign Exchange Policy Department of the central bank on Sunday issued a circular in this regard
Bangladesh Bank has withdrawn the interest rate ceiling for non-resident foreign currency deposit accounts, also known as NFCD accounts.
The Foreign Exchange Policy Department of the central bank on Sunday issued a circular in this regard, instructing the banks to raise fresh deposits from non-resident Bangladeshis and persons of Bangladeshi origin holding dual citizenships.
"Banks earlier had to pay 3-4% interest, following the euro currency deposit rates, against the deposits on NFCD accounts. With the new provision, the banks have now the freedom to determine the deposit rates on their own," a central bank official, wishing to remain unnamed, told The Business Standard.
Keep updated, follow The Business Standard's Google news channel
This relaxation will also be applicable for NFCD accounts maintained by foreign nationals and firms registered and/or incorporated abroad, banks, other financial institutions including institutional investors and 100% foreign-owned (A-Type) industrial units in export processing zones or economic zones in Bangladesh, according to the circular.
The NFCD accounts are like term deposits maturing after one month, three months, six months and one year. The accounts may be maintained in US dollar, pound sterling, euro or Japanese yen; initially with a minimum amount of $1000 or pound sterling 500 or equivalent. Accounts may be opened against remittances in other convertible currencies after conversion of those into US dollar, pound sterling, euro or Japanese yen.
Foreign nationals and companies/firms registered and/or incorporated abroad, banks, and other financial institutions including institutional investors and 100% foreign-owned (A-Type) industrial units in export processing zones or economic zones in Bangladesh, are also allowed to open and maintain NFCD accounts with the banks. The minimum amount of deposits in such cases should be $25,000 or equivalent in pound sterling, euro or Japanese yen.
The Banks may utilise 50% of the balances of NFCD accounts for discounting of usance export bills of Type A and Type B units of export processing zones or economic zones, and payment of back-to-back LC opened on a sight basis. Amounts so utilised should immediately be replenished on the realisation of respective export proceeds.
Rev: Moin
