BB eases forex rules further

The central bank has relaxed its foreign exchange (forex) regulations further, allowing banks to remit admissible payment abroad on behalf of the companies concerned up to 1.0 per cent of annual sales or US$0.01 million whichever is higher.
Under the relaxations, authorized dealer (AD) banks are allowed to remit admissible expenses up to 1.0 per cent of annual sales as declared in the previous year's income tax return of the remitter-companies concerned or $100,000 whichever is higher, according to a notification issued by the Bangladesh Bank (BB) on Monday.
"Such relaxations will empower the banks to make outward remittances on behalf of their customers for meeting current legitimate expenses within the set threshold," a BB senior official told the FE while explaining the main objective of the notification.
He also said the central bank has been updating regulations continuously to facilitate the overall business activities across the country.
Shah Muhammad Ashequr Rahman, head of finance and commercial at Bangladesh Honda Private Limited (BHL), welcomed the BB's latest move, saying that it has removed an obstacle for sending outward remittances for any kind of services within the limit.
BHL operates in a single industry segment in Bangladesh under a joint venture between Honda Motor Company Limited, Japan and the state-run Bangladesh Steel and Engineering Corporation.
"It will also help improve the ease of doing business in Bangladesh," Mr. Rahman told the FE while explaining the impact of the relaxations. "It will also help attract foreign direct investment (FDI) in the country."
Earlier on November 19 last calendar year, the central bank widened the scope of remittance facilities within the limit of 1.0 per cent of annual sales without confining to training and consultancy fee.
The BB had also allowed other legitimate current account payments like audit fee, certification fee, commissioning fee, testing fee and valuation fee. The facilities were made applicable to industrial enterprises operating in domestic processing areas of economic zones selling goods in the local currency--Bangladesh Taka (BDT).
But it restricted remittances for which permission is required from the competent authorities like Bangladesh Investment Development Authority (BIDA) for payment of royalty, technical knowledge/technical assistance and franchise fee.
The latest notification, however, extended the facilities further by linking the absolute figure of $100,000 with 1.0 per cent of previous year's sales whichever is higher, according to the central banker.