Alongside expats, foreigners also make deposits in BRAC’s offshore banking : DMD

BRAC Bank, a leading private commercial bank with the largest SME exposure, is now planning to expand its offshore banking deposit collection from expatriates.

The bank, which has invested heavily in technology over the past couple of years, will introduce online facilities for opening offshore banking deposit accounts.

Additionally, it is offering a maximum interest rate of 8.58% for offshore banking foreign currency deposits. In addition to Bangladeshi expatriates, foreign nationals will also be able to make offshore deposits at this bank.

Recently, Md Shaheen Iqbal, deputy managing director and head of Treasury and Financial Institutions at BRAC Bank, shared details about the bank's offshore banking deposit facilities for expatriates in an interview with The Business Standard.

How can a customer open an account to make a deposit? What kind of benefits is BRAC Bank providing in this case?

By the first week of October, we will launch an online service allowing expatriate customers to open accounts. Customers will be able to complete the process online using their national IDs. Additionally, they will need to provide basic information such as their work permit, passport details, photograph, and nominee information. Once the account is activated, customers can access and manage their transactions through BRAC Bank's "Astha" app, enabling them to conduct transactions in Bangladesh from abroad.

For customers who are not familiar with online processes, accounts can also be opened by emailing BRAC Bank's help desk. In this case, the help desk will request the necessary information and documents, but this option may take a little more time.

How will customers receive interest if they deposit in offshore banking? And what kind of benefits will they get?

Most non-resident Bangladeshis prefer to keep their deposits in the taka, while many others opt for US dollars. To cater to both, we offer a range of products.

Customers can open a current account with BRAC Bank's Offshore Banking Unit, providing the convenience of managing a bank account in both Bangladesh and abroad. This includes benefits such as debit cards and the ability to conduct transactions while abroad. From this account, customers can open Fixed Deposit Receipts (FDRs) in foreign currency, with terms ranging from three months to five years. Currently, we are offering 8.58% interest on a 5-year FDR, and the interest will also be paid in foreign currency. Additionally, customers can redeem their FDRs at any time. Importantly, there are no taxes or excise duties applied to this account, and apart from a small transaction fee, it incurs no other costs.

Non-resident Bangladeshi customers can also maintain both offshore and savings accounts. These accounts come with special benefits in addition to a high interest rate. We also plan to introduce death coverage insurance for these account holders. Moreover, interest on deposits will be paid monthly, instead of annually. Customers who deposit larger amounts will receive priority banking services.

Starting next month, we will also launch an airport bus service for our expatriate customers, transporting them from the airport to Gabtoli and Sayedabad bus terminals. We have also introduced higher interest rates and insurance benefits for the family members of our customers.

How many new clients did you get? How much deposit did you get?

This segment will take some time to grow. So far, we have acquired over 100 expatriate customers, with total deposits amounting to approximately $1 million. In addition to expatriate customers, we also have foreign clients who have made deposits in our offshore banking unit. Our total foreign currency holdings are around $1 billion, while the size of our offshore banking unit's portfolio stands at $600 million.

Our target for offshore banking was to collect $20 million in deposits by September, but we were unable to meet this due to various factors, including instability in the country. However, we aim to gather $25-30 million in deposits by the end of 2024 and are optimistic that this will gradually increase over time.

There is now a crisis of confidence in the banking sector. Why will expatriate customers trust BRAC Bank?

It's important to highlight that globally renowned multilateral organisations trust BRAC Bank. When institutions like IFC, ADB, and JICA sought to provide long-term loans to Bangladeshi banks for the first time, most chose BRAC Bank. They extended these loans because they believe in our sustainability. These organisations consider many factors before lending, and their trust is a strong indicator of our bank's stability.

Currently, foreign shareholding in BRAC Bank stands at 32-33%, the highest among many banks in the country. This confidence stems from the solid reputation we have built. In addition, BRAC Bank boasts the highest equity capital among Bangladeshi banks.

What will benefit the country if expatriates deposit dollars in offshore bank accounts?

Offshore banking involves conducting banking operations outside the country's borders, typically transacted in foreign currency. This is necessary for trade-related transactions, for which we often rely on foreign banks. Additionally, domestic banks must establish separate relationships with these foreign institutions.

This is where offshore banking offers significant advantages for our country. When deposits are made in our bank's offshore banking unit, we can provide services at lower interest rates to our customers without depending on foreign banks. This also helps reduce the country's dollar consumption.

In 2022, the foreign currency crisis affected the banking sector, leading to difficulties in opening import letters of credit. Maintaining funds in offshore banking can help address these issues.

Thus, depositing money in the offshore banking account of any bank in the country not only provides attractive returns for customers but also benefits the country as a whole.