Bank branches, hotels, gift shops can now obtain limited money changer licences

Scheduled bank branches, booths, hotels, or establishments like gift shops will now be able to receive limited money changer licences under specific regulations.

On Wednesday (2 July), Bangladesh Bank issued a circular stating that, subject to meeting certain criteria, such establishments can apply for limited money changer licences through authorised dealer (AD) banks.

Licensed bank branches or booths will be permitted to carry out foreign currency buy-sell transactions, endorse dollars in the passports of outbound travellers, encash foreign currencies, and perform other transactions specified in the issued licence.

However, in the case of institutions other than banks, an institution may accept foreign currency in cash only from foreign passport holders in exchange for the sale of its products/services.

According to the circular, the application must be accompanied by necessary documents, including an updated trade license, TIN, BIN certificate, business registration, and rental or ownership documents.

"If the institution is a company, then the certificate of incorporation, memorandum and articles of association, and the financial statement of the previous year must also be submitted."

As per the rules, once the applicant institution receives preliminary approval, it must submit a non-refundable pay order of Tk 50,000 in favour of Bangladesh Bank. However, an important condition is that the license for a branch or booth will not be transferable.

Previously, there was no clear, comprehensive policy for issuing licenses to limited money changers. Primarily, in specific cases, authorized dealer branches of approved banks would conduct transactions at their own discretion.

The circular states that the concerned bank's booth or branch must have adequate infrastructure, security, experienced personnel, and IT systems. In addition, these licensed institutions must regularly report their activities to the designated office of Bangladesh Bank. Also, the business address cannot be changed without prior approval.

At the end of each day's transactions, license holders must convert the received foreign currency into local currency through an AD (Authorized Dealer) branch within the next working day. However, they may retain a maximum of $1,000 or an equivalent amount in foreign currency for transactions.

The validity of this license will be a maximum of two years. It must be renewed before expiration. However, the ultimate authority to issue or cancel this license rests solely with Bangladesh Ban, adds the circular.