Regulatory Alerts2019-11-14
Added · Updated
FEPD Circular Letter No. 26: Use of international cards for online payments
Authorized Dealers must require cardholders to submit an Online Transaction Authorization Form (OTAF) before activating international cards for online payments, deactivating them immediately after transaction execution. Payments for goods or services originated and sold in Bangladesh are prohibited from being settled through international cards. Authorized Dealers must verify that applicable VAT, Tax, and Duty have been paid for cross-border purchases and conduct extended due diligence to prevent misuse for prohibited activities such as gambling or cryptocurrency trading. Failure to comply with these instructions results in the suspension or withdrawal of the bank's general authorization for issuing international cards.
Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka www.bb.org.bd FE Circular Letter No. 26 Date: 14/11/2019 Head offices/principal offices of all Authorized Dealers in Bangladesh Dear Sirs, Use of international cards for online payments Chapter 19 of the Guidelines for Foreign Exchange Transactions-2018 (GFET), Vol-1 outlines operational procedures in issuance of international cards (ICs) against relevant entitlements and payment/online payment thereby for legitimate purposes under current account transactions. International cards are, in general, intended to be used by cardholders while on travel abroad. General permission is, however, given to use international cards in Bangladesh for online payments as specified in the above stated chapter. Paragraph 17 ibid permits ADs to allow their cardholders to use ICs for online payment not exceeding USD 300 or its equivalent at a single transaction against legitimate purchase of items of goods and services (such as downloadable application software, e-books, etc.), magazine/newspaper subscription fees from reputed and reliable sources abroad. 02. This is to clarify that ICs are usable for online payment against legitimate purchase of goods or services from abroad. Payment for purchase of goods/services originated and sold in Bangladesh shall not be settled through ICs. Therefore, card issuing banks are advised to observe extended due diligence so as to avoid misuses (like illegitimate transactions without limiting to capital account transactions, prohibited payments such as for playing online casino/gambling, forex trading, purchase of financial instruments issued in foreign stock markets, purchase of cryptocurrency & lottery ticket etc.) of the general authorization for online payment. Cardholders shall, for online payment through ICs, submit Online Transaction Authorization Form (OTAF) to the ADs stating payment details as per annexure attached herewith. On being satisfied about the legitimacy of the transactions declared on OTAF duly filled in/submitted by cardholders on mobile application, internet platform or in hardcopy, ADs will activate the respective ICs for international transaction and after execution of the transaction the same shall be deactivated immediately. ADs shall verify the executed online transactions with declaration in OTAF and satisfy themeselves regarding payment of applicable VAT, Tax and Duty for online purchase of goods and services from abroad through ICs. OTAF procedure shall also be applicable to execute other permissible international online transactions through ICs from Bangladesh. 03. Failure to comply with aforementioned instructions will eventually result in suspension/withdrawal of bank’s general authorization for issuance of ICs. Please bring the above clarification to the notice of all concerned constituents. Yours faithfully, (Mohammad Khurshid Wahab) General Manager Phone: 9530123
Bank Name: Online Transaction Authorization Form Date: Particulars Cardholder’s name: Card number: Beneficiary name: E-commerce website address: Website URL address (product/service’s sprecific address): Foreign currency amount: Deatils of products/services to be purchased: