The Bangladesh Bank on Thursday withdrew the compulsory interest rate system for resident foreign currency deposit accounts, allowing banks the flexibility to set rates in direct negotiations with customers.
The central bank issued a circular in this regard on the day.
Authorised dealers can determine the rate of interest/profit on banker-customer relations, it said.
Previously, interest/profit was payable on the deposits maintained for minimum one month at mark-up of 1.50 per cent over benchmark rate of respective currencies, such as SOFR.
However, the BB withdrew the instruction of giving interests due to the limited profitability for banks from these accounts, as the deposits are non-investable and must be paid out upon demand.
BB officials said that approximately $50 million in cash dollars was held in the banking sector and encouraged banks to mobilise this currency in the financial market rather than letting it sit idle.
According to BB guidelines, Bangladeshi residents are allowed to open and maintain RFCD accounts with foreign exchange brought at the time of their return from travel abroad.
Any amount brought with declaration in foreign money and jewellery form and up to $10,000 or its equivalent brought in without declaration in cash can be credited to such accounts, it said.
RFCD accounts may be opened in any approved foreign currency such as US dollar, euro, British pound, Australian dollar, Canadian dollar, Swiss franc, Chinese yuan and Singapore dollar.
The balances held in the accounts are freely transferable abroad, including onward foreign travels by account-holders. Account-holders can avail international debit/credit/prepaid card against the balances held in RFCD accounts.
Remittances can be affected on current transactions for dependents of accountholders, in addition to transactions including but without limiting to cost of travel, education for children, treatment, for account-holders.
Without limiting to account-holders themselves, maximum two supplementary international cards (debit/credit/prepaid) may be issued to dependents of accountholders against RFCD accounts.
The balances held in the accounts are freely cashable in the taka as and when necessary.
