The central bank has relaxed regulation allowing foreigners to open temporary non-resident Taka account (NRTA) with any scheduled bank along with authorised dealer (AD) bank branches to facilitate foreign direct investment (FDI) in Bangladesh.
Under the relaxation, interested foreign investors are now allowed to deposit their funds in the name of proposed companies through opening temporary NRTA with both scheduled and AD bank branches.
Earlier the foreign investors are eligible to open such NRTA with only AD bank branches of Bangladesh.
"….temporary NRTA may also be opened by scheduled bank branches apart from authorised dealers," the Bangladesh Bank (BB) said in a notification on Wednesday.
In this case, banks branch will have suitable arrangement with ADs/central processing centres (CPCs) to receive the foreign exchange in their NOSTRO accounts abroad, it added.
"We've relaxed the regulation for encouraging foreign investors to invest more in Bangladesh," a senior official of the Bangladesh Bank (BB) told the FE while explaining main objective of the notification.
Currently, 59 scheduled banks are running their businesses with more than 10, 000 branches across the country while the number of AD bank branches are over 1000.
Under the existing foreign exchange transaction regulations, non-resident investors are now eligible to make direct and portfolio investment in Bangladesh.
"To bring wider scope in foreign investment, it has been decided to allow foreign investment in Alternative Investment Funds (AIF) registered under Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015," another notification said, issued by the central bank on July 30, 2018.
Talking to the FE, another BB official said non-resident investors may use the temporary NRTA for making both direct foreign investment (FDI) and AIF in Bangladesh.
He also said such NRTA will have to be closed after starting business entities formally or completing process of the AIF.
Balance of the temporary NRTA will have to be transferred to the main account of their businesses, he added.
Besides, foreign investors including Non-Resident Bangladeshis (NRBs) are now allowed to invest their hard earned currencies in the country's capital market using Non-Resident Investors Taka Account (NITA), according to the central banker.
"Actually, we need a substantial amount of FDI to achieve the 8.0 per cent plus economic growth by the end of fiscal year 2020-21," the central banker said while replying to a query.
The gross inflow of FDI jumped by more than 44 per cent to $2.66 billion during the July-February period of the current fiscal year (FY) 2018-19 from $1.85 billion in the same period of the FY 18, the official data showed.
Besides, net FDI inflow rose by nearly 25 per cent to $1.18 billion during the period under review from $948 million of the same period of the previous fiscal.
© 2024 - All Rights with The Financial Express
