BB to bend certain compliance rules for offshore banking

The central bank plans to bend certain compliance rules for offshore- banking unit (OBU) operations of select local banks in a policy in the making.

With this end in view, the Bangladesh Bank in a meeting Wednesday took note of the opinions from leaders of the Association of Bankers Bangladesh (ABB).

"We've heard the concerns and suggestions of the ABB before issuing the OBU guidelines," a senior official of the Bangladesh Bank (BB) told the FE after the meeting held at the central bank headquarters in Dhaka.

Deputy Governor of Bangladesh Bank (BB) SK Sur Chowdhury presided over the discussion meeting. A five-member delegation of the ABB, a forum of banks' chief executives, was led by its Chairman Anis A Khan.

The BB official also said the central bank would scrutinise the concerns and suggestions coming from the bankers, who operate their offshore- banking units or OBUs like foreign banks operating in Bangladesh.

Currently, 35 of the total 57 commercial banks run their OBUs across the country as per directives issued by the Banking Control Department of BB on December 17, 1985.

Under the directives, the OBUs are exempt from complying with certain provisions of the Banking Companies Ordinance 1962 as per the government notification.

Besides, the OBUs will also be considered for exemption from Article 36(1) of the Bangladesh Bank Order 1972 on such terms and for such period as may be deemed fit by the government.

It means the OBUs are immune from maintaining CRR (cash reserve requirement) and SLR (statutory liquidity ratio) with the central bank of Bangladesh against their liabilities.

The OBUs are free to accept deposits from outside Bangladesh and borrow from abroad. They are also free to make advances/investments abroad and make permissible transactions with industries in the export- processing zones (EPZs).

The OBUs are allowed to provide foreign-currency loans to their customers.

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