Offshore Banking Bill 2024 placed in parliament

It has been sent to the Parliamentary Standing Committee on the Finance Ministry for review and report within a day

Parliament Correspondentbdnews24.com
Published : 2 March 2024, 09:09 PM
Updated : 2 March 2024, 09:09 PM

The Offshore Banking Bill 2024 has been introduced in parliament with an aim to bolster foreign exchange reserves and entice foreign investment amid a global economic crisis.

Finance Minister Abul Hassan Mahmood Ali placed the Bill, and it was then sent to the parliamentary standing committee on the ministry for review and report within a day.

Bangladesh has been operating offshore banking since 1985 under a finance ministry notification, despite the absence of a specific law.

In 2019, the central bank introduced an offshore banking policy, followed by several notifications. Now, it is being enacted to formalise this practice.

The Bill allows offshore banking to source foreign currency funds from foreign entities, including 100 percent foreign-owned companies operating in approved specialised zones and Bangladesh Bank's approved sources.

Banking activities with non-residents or residents of Bangladesh will be conducted as per central bank's instructions under this Act.

As per the Bill, Export Processing Zones, Private Export Processing Zones, economic zones, and hi-tech parks are authorised to accept deposits from 100 percent foreign-owned companies.

Additionally, offshore banking units can offer short-term loans, open letters of credit, issue guarantees, bill discounting, bill negotiating and other foreign trade-related outsourcing services.

Offshore banks can accept deposits from and disburse loans to non-resident Bangladeshis as well.

The Bangladesh government will not levy taxes on the interest or profits earned from these deposits.

Offshore banking involves utilising foreign currency funds for bank investments from overseas sources.

The operations can be conducted in five currencies: dollar, pound, euro, yen, and yuan.