Banks free to remit payments abroad

Banks now get a free hand to remit various payments abroad sans prior approval from the central bank as the banking regulator relaxes the foreign- exchange rules.
The Bangladesh Bank issued Thursday three notifications to this effect on hopes for a boost in inward remittance by way of gaining confidence of the remitters or companies so that they can feel encouraged to send increased inbound remittances in future.
"There is a correlation between outward and inward remittances. Rising flow of outward remittances normally helps attract more inflow of remittances," a BB senior official told the FE about the merit of bending the forex rules.
He also thinks such relaxations in foreign-exchange rules will help reduce transaction costs which will also push down cost of doing business in Bangladesh.
The central bank allows the banks to make payment on account of lease rentals by the airlines incorporated in Bangladesh to facilitate the country's aviation sector.
"…. ADs (authorized dealers) may affect remittances on account of lease rentals by the airlines incorporated in Bangladesh up to the guaranteed hours subject to bonafide according," the central bank said in its notification titled 'Remittance of aircraft lease rental by airlines incorporated in Bangladesh'.
Market operators welcome the latest BB moves, on hopes that it will help expansion of the aviation sector in Bangladesh.
Talking to the FE, Kamrul Islam, General Manager-Public Relations, US-Bangla Airlines, said his company leased around 60 per cent of their total aircraft fleet.
"The BB's latest decisions will help bring a positive impact on the country's aviation sector," Mr. Islam said while replying to a query.
Another notification allows remittances for service charges on account of cloud services, IT infrastructure and remote software applications.
It has been decided to include remittances on account of usage fees for cloud services, IT infrastructure and remote-software applications within the regulatory framework, according to another notification, titled 'Outward remittances on account of cloud and other related service usage fees'. The banks are allowed to make such payment on behalf of service arrangers routing respective services to the ultimate users.
However, resident Bangladeshis proceeding abroad for professional or skilled employment abroad and immigration are allowed to maintain bank accounts in the respective countries before obtaining visas, the central bank says in its notification titled 'Maintenance of bank accounts abroad and deposits therein,'.
"To encourage professional/skilled-category employment abroad and immigration, it has been decided that ADs may allow applicants to maintain bank accounts in the countries in which they intend to proceed and remit funds therein before obtaining visas," it notes.
The notification also says banks will be allowed to remit funds to deposit in the accounts as per requirement of relevant authorities abroad.

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