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Bangladesh Bank (BB) introduced a new banking facility called Non-Resident New-Convertible Taka Account (NRCTA) for non-resident Bangladeshis, aiming to attract more remittance and investment into the country’s economy.
The central bank issued a circular on Tuesday in this regard allowing NRBs to open and maintain Taka accounts with Offshore Banking Units (OBUs) of scheduled banks.
Funds deposited in these new accounts, along with earned interest, can be freely repatriated abroad while also being used for various investment and financial activities inside Bangladesh.
Under the new rules, NRCTAs can receive inward remittances sent through banking channels, transfers from other NRCTA accounts, investment earnings and approved refunds. The accounts can be opened as savings, current or fixed deposit accounts.
Deposits will earn market-based interest or profit in local currency.
BB has given NRBs wide flexibility in using the funds. Account holders can make legitimate local payments, transfer money to other non-resident accounts, convert funds into foreign currency accounts, and invest in foreign direct investment (FDI) projects or the stock market through approved channels.
The central bank has also allowed banks to use NRCTA deposits to support industrial activities and lending. Offshore Banking Units may provide Taka loans to export-oriented Type A industries operating in specialized economic zones.
These loans can only be used for current expenses such as salaries, wages and utility bills and must be repaid from export earnings.
In another major provision, banks can offer loans against NRCTA deposits to NRBs or their nominated individuals, firms or companies in Bangladesh. The loans may be used for personal needs, business purposes, non-repatriable investments or purchasing residential property for personal use.
However, funds cannot be used for relending, agricultural and plantation activities or real estate business investments because of higher risks and uncertain returns.
BB directed banks to maintain strict compliance with Know Your Customer (KYC), Anti-Money Laundering (AML), Counter Financing of Terrorism (CFT), tax regulations and reporting requirements. Banks have also been encouraged to introduce online account opening and digital banking services for NRCTA holders.
Before launching the product, banks must inform Bangladesh Bank about account features, operational procedures, risk management systems and compliance arrangements.
Officials believe the new account facility will make it easier for expatriate Bangladeshis to keep, invest and manage their funds in Bangladesh while ensuring full flexibility in moving money across borders, said the circular.
SH/IF
