BB introduces special custodial accounts for licensed money changers

Licensed money changers in Bangladesh will now be able to keep physical foreign currency in special custodial accounts with authorised dealer (AD) banks, following a new decision by Bangladesh Bank (BB).

In a circular issued on Wednesday (4 November), the central bank outlined the rules for opening and operating these accounts. The facility is intended to ease cash handling and reduce the risks associated with transporting foreign currency.

Under the new instructions, money changers can deposit foreign currency without any fixed upper limit, provided the amount is consistent with their business records and transaction history. However, the deposits will not earn any interest.

To ensure safe transportation, licensed money changers must maintain valid insurance coverage for cash carried between locations. If the amount exceeds the limit set by an AD bank, they must use licensed cash transportation companies or arrange properly secured transport with escorts.

For deposits made towards the end of the banking day, banks have been instructed to arrange secure counters and temporary vault facilities to safeguard the cash.

Authorised representatives of money changers can withdraw funds through cheques or withdrawal slips, subject to the available balance. The accounts will not allow overdrafts or any form of credit facility.

Under the guidelines, these accounts cannot be used for fund transfers, remittance services or transactions involving third parties. All transactions must be conducted using physical foreign currency notes.

Through this move, BB aims to improve cash management, strengthen security and bring greater discipline to foreign currency transactions by licensed money changers.