Bangladesh Bank officials surprised at finance ministry’s directive over repatriating money

The Bangladesh Bank officials have expressed amazement at the Financial Institutions Division's recent directive on easing the process of repatriating foreign investors' money as the central banks had already issued a circular in this regard. 
The Bangladesh Bank on June 18 issued a circular, easing the conditions of repatriating foreign investors' money. 

In the circular, the Bangladesh Bank allowed foreign investors to repatriate up to $100 million of the invested money or dividend without the central bank's approval. Bangladesh Bank officials opined that 98 percent of the problems in repatriating money is solved with this measure.

But on June 23 the Financial Institutions Division (FID) of the finance ministry sent a letter to Bangladesh Bank Governor Dr Fazle Kabir to ease the process.

When contacted, Md Shukur Ali, joint secretary of FID said, "The prime minister at a cabinet meeting on June 8 directed officials concerned to take initiatives so that foreign investors can repatriate their money and dividends easily. We sent the letter after that." 

In the letter, the FID said the interest rate in local banks is higher than that in foreign banks. So, foreigners and expatriates are getting interested in investing into saving schemes in Bangladeshi banks. But, they face a complicated process when they want to withdraw or repatriate money at the end of such schemes. This is discouraging them. 

So, the FID directed the central bank to ease this process.

However, on condition of anonymity a senior official of the Bangladesh Bank told The Business Standard that Bangladeshis and foreigners living in Bangladesh can keep deposits in local banks. If expatriates and foreigners are allowed to enjoy 6 percent deposit rate at local banks, the interest on that cannot be paid even by printing money.  

Interest rate on deposits is less than 1-2 percent in banks in different countries around the world. If foreigners are allowed to invest in saving schemes in Bangladeshi banks, people from all over the world will deposit money here, he added.

Bangladesh Bank officials said Bangladeshi expatriates can invest in saving certificates and bonds. They can repatriate the money invested in these and their dividends. 

The central bank officials also raised questions about publishing a letter to the central bank governor on the ministry's website.

Shukur Ali said, "We are not experienced in these issues. The Bangladesh Bank officials are expert in these matters. They will take decisions in this regard according to their own considerations."

An official of the Foreign Exchange Investment Department of the central bank said foreign investors can transfer their dividends to foreign currency accounts. However the central bank has no specific directive in this regard. It will issue a circular next week to clear the matter.