BB allows custodial FC accounts for licensed money changers

Bangladesh Bank (BB) has allowed authorized dealer (AD) banks to provide foreign currency (FC) custodial account facilities to licensed money changers to enhance cash management, mitigate transit risks and ensure the secure movement of physical foreign currency.

The central bank issued a circular in this regard on Wednesday, setting out guidelines for opening and operating such accounts.

According to the circular issued by the Foreign Exchange Policy Department-2, the accounts will be used solely for the safe custody, deposit and withdrawal of physical foreign currency notes and will not be treated as interest- bearing deposit accounts.

Under the guidelines, deposits may be made irrespective of the prescribed ceiling, subject to documented business turnover and transaction profiles.

Money changers will be allowed to deposit surplus foreign currency during banking hours and withdraw it on the next business morning or as required, subject to available balances.

The circular also requires money changers to maintain valid Cash-in-Transit (CIT) insurance covering theft, robbery, loss or damage during transportation to and from designated AD branches, up to the applicable single-transit limit.

Currency movements exceeding limits prescribed by AD banks must be carried out through licensed CIT services or escorted transport. Banks have also been advised to provide secure counters and temporary vault storage facilities for late-day deposits.

Under the withdrawal provisions, AD banks may offer cheque or withdrawal slip facilities, with payments made only to duly authorized representatives whose signatures, photographs and credentials are recorded.