BRPD Circular Letter No. 04: Restriction on Fund Transfer from Domestic Banking to Offshore Banking

Bangladesh Bank
Head Office
Motijheel, Dhaka-1000
Bangladesh
Website: www.bb.org.bd
Banking Regulation and Policy Department
BRPD Circular Letter No. 04
16 January 2024
Date: --------------------
02 Magh 1430
Managing Director/Chief Executive Officer
All Scheduled Banks Operating in Bangladesh
Dear Sir,

Regarding the Abolition of Fund Transfer from Domestic Banking to Offshore Banking

Your attention is drawn to BRPD Circular No. 2, dated 25 February 2019; BRPD Circular Letter No. 31, dated 18 June 2020; and BRPD Circular Letter No. 9, dated 31 January 2021, on the above subject.

2. In BRPD Circular No. 2/2019, the limit for fund transfer from domestic banking to offshore banking was set at a maximum of 20% of the bank's total regulatory capital; which was subsequently re-fixed at 30% through BRPD Circular Letter No. 31/2020. Despite this, as the funds transferred from domestic banking to offshore banking in some banks exceeded the prescribed limit, BRPD Circular Letter No. 9/2021 granted time until 31 December 2021 to bring it down within 30%.

3. Now, with the aim of bringing greater dynamism to foreign exchange management and reducing the dependence of banks' offshore banking operations on domestic banking, the transfer of funds from banks' domestic banking to offshore banking is hereby abolished, and instructions are given to gradually reduce and fully adjust the funds previously transferred from domestic banking to offshore banking by 31 December 2024.

4. Furthermore, other instructions mentioned in BRPD Circular No. 2/2019; BRPD Circular Letter No. 31/2020; and BRPD Circular Letter No. 9/2021 will remain unchanged.

5. This instruction will be effective immediately and will remain in force until further notice.

6. The above instruction is issued under the powers conferred by the Bank-Company Act, 1991 and The Foreign Exchange Regulation Act, 1947.

Yours faithfully,
(Mohammad Shahriar Siddique)
Director (BRPD)
Phone: 9530252