Non-resident Bangladeshis (NRB) will no longer need to visit a bank branch in Bangladesh to open an investment account, after Bangladesh Bank (BB) allowed the entire process to be completed online and widened the range of instruments they can buy.
The change addresses a long-standing complaint that overseas Bangladeshis who want to invest in the stock market often struggle to complete banking formalities from abroad.
In a circular issued on Thursday, the Foreign Exchange Policy Department-2 of the central bank instructed authorised dealer banks to simplify documentary requirements for opening Non-Resident Investor’s Taka Accounts (NITA) and to build online interactive platforms for applicants overseas.
Under the new instructions, NRBs can complete account-opening applications online and upload scanned copies of the required documents without physically visiting a branch in Bangladesh. Banks have been told to publish detailed guidelines on their websites explaining the procedure, and the online systems must include application forms that let prospective investors submit information and supporting documents electronically.
Once an application arrives, the bank verifies the information and documents before advising the applicant to remit the required deposit. Banks may also accept deposits through international cards by arranging with card-issuing authorities. For deposits through conventional channels, banks must ensure the funds originate from the applicant’s overseas bank account. After the remittance is received and credited to the NITA, the bank issues a personal identification number so the holder can operate the account online.
The paperwork has been trimmed to five basic categories- a valid passport copy, a photograph, and proof of address, information on the applicant’s reliable source of income, a passport or national identity card copy of the nominee or an authorised person, and the nominee’s photograph. Banks have also been told to keep a uniform set of documents for opening investment accounts for non-resident foreign nationals and institutions.
The circular goes further on what the accounts can hold. NITAs can now be used to buy units of open-ended mutual funds as over-the-counter products, where previously they mainly facilitated portfolio investment in listed shares and securities. The funds must be authorised from the Bangladesh Securities and Exchange Commission (BSEC) and have prospectuses approval by the regulator, and BB’s Foreign Exchange Investment Department (FEID) must be informed within 14 days of issuing units to foreign investors.
Existing provisions are retained. NITAs can still be used to purchase shares and securities listed on Bangladesh’s stock exchanges. Investors can transfer eligible balances to foreign currency accounts or repatriate funds abroad in equivalent foreign currency. Dividends and interest, after applicable tax deduction, can be credited to NITAs, as can proceeds from the sale of shares and securities, subject to tax and regulatory requirements.
Repatriation of mutual fund sale proceeds, however, will need BB approval and compliance with valuation and disclosure requirements. Eligible dividend income and sale proceeds may also be transferred to resident Bangladeshi nationals on written request to fund managers, with notification to BB.
Separately, BB’s 8 October circular on Non-Resident Convertible Taka Accounts broadened banking and investment facilities for overseas Bangladeshis. NRBs can open savings, current or fixed-deposit accounts with authorised dealer banks and offshore banking units, and Bangladeshi nationals preparing to go abroad for employment can open these accounts without an initial deposit before departure.
Principal and accrued interest or profit are freely repatriable, balances can be used for local payments and transfers to other eligible non-resident accounts, and banks can lend Taka against NRCTA deposits held with offshore or domestic banking units as collateral. These accounts may also be operated through the power of attorney granted to a resident individual.
Compliance requirements remain. Banks must maintain know-your-customer (KYC), anti-money laundering and combat the financing of terrorism standards, keep proper records and submit required reports to BB.
The central bank’s aim is to reduce geographical and administrative barriers and make the domestic financial market more attractive to NRBs. How far that succeeds will depend largely on how quickly banks develop digital platforms and implement the new procedures smoothly.
