Bangladesh Bank on Sunday allowed authorised dealer (AD) banks to treat foreign currency balances held by Bangladeshi shipping companies and airlines as renewable, interest- or profit-bearing term deposits, aiming to encourage foreign currency earnings from international operations.
The central bank said the decision applies to Bangladeshi shipping firms and airlines engaged in international operations, under which balances in foreign currency accounts may be placed as renewable term deposits in approved foreign currencies with respective AD banks, according to a circular issued by Bangladesh Bank.
The central bank said the move has been taken in view of rising income from global operations of shipping companies and airlines, and to encourage inward remittance earnings.
Under the new instruction, the tenure of such deposits will be determined in line with standard banking practices, while banks have been allowed to offer interest or profit based on banker-customer relationships and prevailing market conditions for respective currencies.
However, Bangladesh Bank said interest or profit must be paid in local currency at the prevailing spot exchange rate, according to the circular, which was issued to all authorised dealers in foreign exchange in Bangladesh.
