Offshore Banking Act okayed to boost reserves
Staff Reporter :
The Cabinet, in its regular meeting on Wednesday, gave the green light to the draft of the ‘Offshore Banking Act, 2024,’ with the primary objective of bolstering foreign currency reserves and enticing foreign investments.
The meeting, presided over by Prime Minister Sheikh Hasina, took place at her Tejgaon office in Dhaka.
Following the meeting, Cabinet Secretary M. Mahbub Hossain provided detailed insights into the new law during a press briefing at the Secretariat. According to Hossain, the law allows non-resident individuals or foreign entities investing in Bangladesh to open offshore bank accounts. To engage in offshore banking, a license from the Bangladesh Bank is mandatory, though those already holding licenses need not renew them.
He highlighted that offshore banking operations can now be conducted using five major currencies – US Dollar, Pound, Euro, Japanese Yen, and Chinese Yuan. Moreover, relatives of Bangladeshis living abroad are permitted to open accounts and manage them as account supporters.
In a significant shift, foreigners depositing money within Bangladesh’s internal banking system currently require permission to remit funds out of the country. However, with the introduction of offshore banking, this process becomes more flexible and free.
“We hope that those who benefit from doing business in the country will be interested in depositing their money here,” expressed Cabinet Secretary Mahbub Hossain, emphasizing the potential economic benefits.
Hossain clarified that the offshore banking initiative not only aims to increase reserves but also seeks financial advantages. Depositors in offshore accounts will not face inquiries regarding the source of their funds, providing a conducive to environment for financial transactions.
Under the proposed law, individuals or firms residing abroad, as well as foreign entities, will be granted permission to open bank accounts. Additionally, the meeting cleared a proposal to amend the existing agreement between Bangladesh and the Netherlands concerning the avoidance of double taxation and the prevention of tax evasion.
The approval of the ‘Offshore Banking Act, 2024’ reflects the government’s commitment to fostering a more attractive environment for foreign investment and strengthening the nation’s economic foundations.
