Offshore depositors in Brac Bank to get 3% more interest compared to UK, US
And among all the banks with Offshore Banking Units, Brac Bank is offering the highest interest rates, says the bank’s managing director and CEO. To gauge the performance of a bank, customers can check the capital adequacy ratio, return on assets, capital, and cost-income ratio. Apart from this, an important aspect is how the bank’s NPL is. According to Selim, Brac Bank is at the top in all these respects
Under the new Offshore Banking Act, Bangladesh's banks are offering attractive interest rates for foreign currency deposits.
And among all the banks, Brac Bank is offering the highest interest rates.
Compared to the interest rates that customers are getting on deposits in the US and Europe, Brac Bank is offering 2% to 3% more. The interest rate in the US is not more than 5% to 5.5% now, but in Bangladesh, customers are getting 8% to 8.5% interest rate.
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Secondly, customers have confidentiality and full security of these funds. The offshore banking units are secured through the Offshore Banking Act 2024. There are offshore banking units of 25 to 30 banks in Bangladesh. These are controlled by the strict rules and regulations of the central bank.
A streamlined regulatory system ensures no excise duty or income tax applies to these foreign currency deposits.
Customers can withdraw any amount of dollars they invest here with interest at any time. Now, it is the customer's choice in which bank they will invest. Before investing, customers need to understand and invest by looking at the financial strengths, reputation, governance, and institutional governance of the banks.
Researching online via bank websites is one way for customers to identify a suitable institution, he noted. Alternatively, they can consult with relatives and friends in the country.
Usually, customers need to look at the credit rating of the bank before investing. In this case, you can look at both domestic and international credit ratings. Check the financial performance of that bank in the last four to five years. Apart from this, you will also have to see if it has a credit rating from the central bank. Brac Bank is ahead in all the matters that I have mentioned.
Brac Bank has been banking diligently in Bangladesh for 23 years. Brac Bank has been growing by about 30% every year in the last three to four years in terms of deposits and loans. We are ranked third or fourth in terms of deposit and loan size in the country. We will transform ourselves into the largest private bank in the country within the next four to five years.
Where the average market growth in the banking sector of the country is around 10%, Brac Bank's growth is around 30%. I believe that the trust that our Brac Bank customers have now will gradually increase by several times.
Our customers will get all kinds of digital services. From opening an account to account balance, etc. There will be a relationship officer 24 hours a day. You can talk to them anytime on Imo or WhatsApp. So I would say that our services will be of the highest quality.
Customers can withdraw their money whenever they want to take it abroad. They will get easy transactional support from Brac Bank.
Customers can inform by writing or email if they want to transfer their deposits. We will have a digital transformation for this by July. We also have an app called Astha through which you can transfer your money.
The Philippines, Thailand, Malaysia, India and Sri Lanka have been in operation for many years. I think we have also started it at the right time, it will contribute well to the increase of foreign currency balance in our financial account.
Bangladesh has offshore banking units of 30 banks at present. The size of Brac Bank's OBU is around $700 million. Brac Bank provides foreign trade support to customers through these. It supports them if they import or take loans from abroad through this.
Out of our $700 million, we have received $50 million as deposits and the rest has been brought in as loans through foreign correspondent banks. The cost of these funds here is around 8.5%. We believe that if we give such interest to our people instead of bringing it from foreigners, it will be a good benefit for our people. Our source of funding will also increase.
The lion's share of foreign currency funding in our country comes from exports and remittances. Apart from this, we get loans from foreign banks and foreign multilaterals. Selim thinks OBU deposits will be a new source of foreign funds for the country.
Mauritius, a small island, has $800 million in foreign deposits. If they have this amount, we also have the opportunity to get foreign funds through this sector. We want to have $1 billion in two years across Bangladesh.
We are hoping for $400 million in just three years from Brac Bank. It will be easier for our customers for whom we give trade loans," he noted,
Selim said Brac Bank is initially targeting expatriate Bangladeshis. Customers of our bank can keep any amount of dollars as a deposit, starting from $500. Bangladeshis as well as expatriates living abroad can deposit here. Foreigners living in Bangladesh or institutional customers can also deposit here.
To gauge the performance of a bank, customers can check the capital adequacy ratio, return on assets, capital, and cost-income ratio. Apart from this, an important aspect is how the bank's NPL is.
Brac Bank is at the top in all these respects.
In addition, domestic and foreign credit rating agencies have given our Brac Bank the highest rating. Apart from this, Moody's, the most important foreign rating agency, and S&P have given Brac Bank the highest rating among the banks in Bangladesh.
