Govt to amend forex regulation soon
Tuesday, 4 December 2007
Siddique Islam
The government is going to amend the existing Foreign Exchange Regulation Act, 1947 soon to make it time-relevant and ensure its effective implementation in line with international standards, official sources said.
The interim government has sought a fresh draft report from the Bangladesh Bank (BB) in this connection examining the proposals submitted by the ministry of commerce and the Securities and Exchange Commission (SEC) earlier.
The move has been taken to facilitate foreign trade through specifying some definitions including export, import, capital account, current account and residence to resolve confusions of the banks, the sources added.
The decision came at a joint meeting of the BB, SEC and Ministry of Finance, held in the secretariat Monday with Joint Secretary of the Finance Ministry Amalendu Mukharjee in the chair.
The meeting discussed the draft amendment proposals and decided that the central bank will prepare a fresh draft report considering all proposals, submitted earlier by the stakeholders.
"We will prepare a fresh draft proposal for amendment of the act in line with the advice of the finance ministry," a BB senior official, who is close to the move, told the FE.
He also said the central bank earlier submitted a draft proposal to the ministry of finance for taking necessary measures.
The draft was prepared on the basis of opinions from different stakeholders including business community, bankers and senior government officials for amendment of the law.
All types of foreign exchange transactions will be brought under the amended law to ensure proper scrutiny, another BB official said.
He also said definition of resident and non-resident foreign currency account holders has been included in the draft proposals to guide the banks in opening accounts. Under the draft proposals, the central bank may impose financial penalty on banks or their employees for violation of the act, the sources added.
Besides, the existing law was amended in 2003 to increase the period of punishment for violating foreign exchange rules and regulations up to four years from existing two years, the sources added.
Some neighbouring countries including India, Pakistan and Sri Lanka have already amended their foreign exchange rules and regulations in line with the international practices.
The government is going to amend the existing Foreign Exchange Regulation Act, 1947 soon to make it time-relevant and ensure its effective implementation in line with international standards, official sources said.
The interim government has sought a fresh draft report from the Bangladesh Bank (BB) in this connection examining the proposals submitted by the ministry of commerce and the Securities and Exchange Commission (SEC) earlier.
The move has been taken to facilitate foreign trade through specifying some definitions including export, import, capital account, current account and residence to resolve confusions of the banks, the sources added.
The decision came at a joint meeting of the BB, SEC and Ministry of Finance, held in the secretariat Monday with Joint Secretary of the Finance Ministry Amalendu Mukharjee in the chair.
The meeting discussed the draft amendment proposals and decided that the central bank will prepare a fresh draft report considering all proposals, submitted earlier by the stakeholders.
"We will prepare a fresh draft proposal for amendment of the act in line with the advice of the finance ministry," a BB senior official, who is close to the move, told the FE.
He also said the central bank earlier submitted a draft proposal to the ministry of finance for taking necessary measures.
The draft was prepared on the basis of opinions from different stakeholders including business community, bankers and senior government officials for amendment of the law.
All types of foreign exchange transactions will be brought under the amended law to ensure proper scrutiny, another BB official said.
He also said definition of resident and non-resident foreign currency account holders has been included in the draft proposals to guide the banks in opening accounts. Under the draft proposals, the central bank may impose financial penalty on banks or their employees for violation of the act, the sources added.
Besides, the existing law was amended in 2003 to increase the period of punishment for violating foreign exchange rules and regulations up to four years from existing two years, the sources added.
Some neighbouring countries including India, Pakistan and Sri Lanka have already amended their foreign exchange rules and regulations in line with the international practices.