Dhaka, Bangladesh (BBN)- The central bank of Bangladesh has asked all commercial banks to preserve files and other documents of customers, who work as agents for foreign companies or firms, to avoid risks, officials said.
Under the new provisions, the authorised dealer banks will have to maintain the customer-wise files with updated agency agreements and copies of licences or permissions, if applicable, issued by the competent authorities, according to an instruction issued by the Bangladesh Bank (BB) on Thursday.
Talking to BBN, a BB senior official said it will help the banks comply with other rules and regulations particularly on taxes, Anti-Money Laundering (AML) and Counter Terrorist Financing (CFT).
He also said the banks would have to go by other relevant regulations such as AML/CFT standards and taxes for executing foreign exchange transactions.
The banks would be satisfied that the agents have necessary arrangements with foreign principals to repatriate their monthly payments, he added.
“In case of commission, remuneration, fee, service charges, etc. to be receivable by agents on transaction basis as per agreements, the payment shall be repatriated immediately on financial settlement between foreign principals and concerned persons/firms in Bangladesh,” the BB said in its instruction.
Foreign exchange transactions on account of agents working in Bangladesh on behalf of foreign shipping companies, airlines, stock brokerage firms, courier services, railway companies, satellite channels, tour operators and freight forwarders shall be guided by instructions contained in the Guidelines for Foreign Exchange Transactions-2009, Vol-1, and its subsequent Foreign Exchange (FE) Circulars and Circular Letters.
The BB’s instruction came after dropping of the Section 18A of Foreign Exchange Regulation Act, 1947 from the existing Foreign Exchange Regulation (Amendment) Act, 2015.
With the deletion of Section 18A of Foreign Exchange Regulation Act, 1947, permission from the central bank is no longer required for resident persons/firms to work as agents on behalf of foreign principals.
Accordingly, no permission is required for encashment of inward remittances repatriated by local agents on account of commission, remuneration, fee and service charges.
On the other hand, the banks will have to prepare and maintain a list of its clients of branch, representative and liaison offices, nominated by them.
Permission from Board of Investment (BoI) or similar competent authority for setting up branch, representative and liaison offices will have to be reported, within 30 days of obtaining such a permission, to the BB through the nominated banks of the concerned office with other necessary documents, including encashment certificate.
Moreover, renewals of permissions (if any) will have to be reported to the concerned departments and offices of the central bank by the same time limit.
The offices that have already obtained such permissions from the BB or the BoI, according to another instruction issued by the BB the same day, will also have to file such reports.
In case of change of nominated banks, the branch, representative and liaison offices will have to collect no-objection certificates from current nominated banks for onward submission to new nominated banks, it added.
“Information related to change of nominated bank shall have to be intimated to Foreign Exchange Investment Department, Foreign Exchange Operation Department and concerned office (in applicable case) of the BB,” the central bank mentioned.
BBN/SSR/AD