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MONDAY, JUNE 16, 2025
Financial Intelligence Unit warns banks against buying remittance dollars at higher rates

Banking

Tonmoy Modak
20 July, 2023, 10:35 pm
Last modified: 22 July, 2023, 10:48 am

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Financial Intelligence Unit warns banks against buying remittance dollars at higher rates

Tonmoy Modak
20 July, 2023, 10:35 pm
Last modified: 22 July, 2023, 10:48 am
Representational image. Photo: Collected
Representational image. Photo: Collected

The Bangladesh Financial Intelligence Unit has issued a warning to all banks, cautioning them against collecting remittances at rates higher than the prescribed rate. 

In a letter issued to this effect on Thursday addressing to the bank managing directors, the intelligence unit observed that certain commercial banks operating in Bangladesh have been paying more than the fixed rate for remittances from abroad. As a result, the agency has advised these banks to refrain from such transactions in the future and to exercise caution in this matter.

The prescribed rate for banks to collect remittances is determined by the Bangladesh Foreign Exchange Dealers' Association (Bafeda) and the Association of Bankers, Bangladesh (ABB). 

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According to the latest decision, banks are required to collect remittances at a maximum rate of Tk108.50. 

The central bank has repeatedly emphasised that all banks must adhere to this rate. Furthermore, Bafeda and the ABB have set a rule that no more than Tk109 can be charged for selling dollars.

As part of their investigation into the matter, the central bank is examining 14 banks that are allegedly offering higher rates for buying remittance dollars and selling dollars for import settlement.

A senior official from the Financial Intelligence Unit has revealed that a meeting was held with representatives from seven banks and nine money exchange houses on 6 July. 

During the meeting, banks were warned not to collect remittances at rates higher than the prescribed rate. Despite this warning, it has come to their attention that many other banks are still offering higher rates. 

The official further stated that if banks continue to offer higher rates, they may face punitive measures, including fines. The banks have been urged to abide by the rules and regulations set forth by the authorities.

A senior official from a private bank noted that when some banks offer higher rates for remittances, it creates pressure on other banks. This, in turn, prompts money exchange houses to demand higher rates for remittance dollars.

Consequently, banks that follow the prescribed rates experience a decrease in remittances. As a result, there has been an increase in the number of banks offering higher prices for remittances compared to previous periods.

It is evident from a review of monthly figures for remittance income that some banks are indeed offering higher remittance rates. 

These banks incur higher costs to buy dollars, which leads them to sell dollars at a higher price. As a result, they are unable to sell dollars at the fixed rate of Tk109 as set by Bafeda and the ABB.

In a report titled "Remittance hits 35-month high in June," published in The Business Standard on 3 July, it was highlighted that many banks were offering rates higher than the prescribed remittance rate set by Bafeda.

Data from the central bank revealed that Bangladesh received a total of $21.61 billion in remittances in FY23, marking a 2.75% increase compared to the previous fiscal year's figure of $21.03 billion. In the first 14 days of July 2023, the country received $996 million in wage earners' remittances.

Economy / Top News

remittance / Dollar rate

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