Dhaka, Bangladesh (BBN)– Three commercial banks of Bangladesh are set to open branches in Saudi Arabia this year as they got the Bangladesh Bank’s go-ahead to this end.
Officials said state-owned Sonali Bank along with two private banks –Social Islami Bank and Exim Bank –will open branches in compliance with the customary policies of the Muslim country.
The central bank of Bangladesh has already given permission to the banks to open their branches in the Kingdom of Saudi Arabia (KSA), a BB official said.
Earlier, the Saudi government allowed Bangladeshi banks to open branches there to facilitate remittance by Bangladeshi expatriates back home.
Sonali Bank is going to appoint an international consulting firm for submitting an application to the Saudi Arabian Monetary Authority (SAMA).
Social Islami Bank is also working on its proposed branch either in the holy city of Makkah or Jeddah.
The bank has already appointed a firm to expedite its plan to go global.
Things have been made possible after long persuasion by Bangladesh and its mission in Saudi Arabia, the Financial Express (FE) reported quoting a foreign ministry official of Bangladesh.
The Bangladesh embassy in Riyadh wrote to the foreign secretary in 2016, asking him to take necessary measures in this regard.
Later, finance ministry also acted accordingly to take proper steps by the foreign ministry, he added.
Meanwhile, private bankers think setting up branches in the KSA will be a challenge for private or state banks.
“No bank branch can survive there only through collecting remittance. They will have to provide other banking services,” a senior banker said.
Currently, local banks are collecting remittance through banking arrangements, exchange houses and money transfer companies.
Bangladesh is now one of the largest recipients of remittance in the world. And the KSA has been the largest hub of foreign remittance into Bangladesh.
The United Arab Emirates (UAE), Qatar, Oman, Bahrain, Kuwait, Libya, Iraq, Singapore, Malaysia, the USA and the UK are also major sources of remittance inflows.
The country received $14981.69 million in remittance in fiscal year (FY) 2017-18, a significant portion of the amount from the KSA.
Of the total, it bagged $9232.25 million from top five destinations with Saudi Arabia being the largest source of remittance.
The non-resident Bangladeshis living in the KSA sent $2591.58 million in FY ’18.