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Placement of funds from offshore banking operations (OBOs) with domestic banking units will continue to facilitate import payment, amid the forex crisis.
The central bank Wednesday extended time for fund transfer from OBOs to facilitate settlement of import payments for capital machinery, industrial raw materials and imports by the government.
The facility will remain valid till June 30, 2023, according to a circular issued by foreign exchange investment department of the Bangladesh Bank.
This will help in collecting Dollars and mitigate Dollar shortages.
OBOs operate their activity under the central bank guidelines and they usually take deposits and lend through foreign currencies.
Earlier, Bangladesh Bank had extended the facility up to December 31, 2022.
But such placement of funds into domestic banking units will not exceed 25% of a bank’s regulatory capital.
However, a number of bankers feel such facilities usually would not help much on-shore banking.
Offshore banks can borrow from foreign sources to meet their demand for foreign currencies.
Importers and entrepreneurs in Bangladesh are the main clients of such offshore banking and they usually prefer such branches for the availability of foreign currencies.
(DT)
