F.C. Accounts & Remittances

F.C. Accounts & Remittances

F.C. Accounts & Remittances

 

4.27: AN OVERVIEW OF F.C. Account

Private Foreign Currency Account:

 

  1. Authorized dealer may open F.C. A/C in the name of followings without prior approval from Bangladesh Bank.
    • Bangladeshis residing / working / earning abroad including self-employed. Account may be in US Dollar, Pound Sterling, Euro, Detached Mark or Japanese Yen.
    • Foreign Nationals residing abroad / in Bangladesh, foreign firms registered abroad & operating in Bangladesh / abroad.
    • Foreign Missions & their expatriate employees.
  2. Foreign Exchange earned through business done or services rendered in Bangladesh cannot be put into the account.
  • Credits to a foreign currency account may be made against inward remittance of foreign exchange in any form or transfer from another F.C. account or non-resident Taka accounts in banks abroad.
  1. Payment may be made freely abroad / local disbursement also be made freely in Taka from the balance of F.C. account.
  2. AD branch can pay profit on such accounts provided the accounts are maintained in the form of term deposits for a minimum period of 90 days.

 

Papers /Documants Required for opening FCD A/C:

  1. Accounts opening form duly filled in
  2. Specimen signature cards (Both A/C holder and Nominee)
  • Declaration (as per specification)
  1. Photocopy of First 7 pages of Passport (Original for Verification)
  2. Letter of Authority (For nominee)
  3. Photo copy employment contract / self employed document.
  • 3 passport size photograph of nominee attested by A/C Holder.

 

Any person intending to open FC A/C from abroad, must send all the aforesaid papers (except original passport) duly attested by authorized officers of nearest Bangladesh Mission or Foreign correspondent of Authorized Dealer.

 

 

Salient Feature of F.C Account:

  1. May be opened without initial deposit.
  2. Remains operative even if not operated for a long time.
  • Bears no interest.
    1. Operation generally transfers in nature.
    2. Both account holder and nominee can operate.
  • Cheque books or withdrawal form can be used.

 

, readymade garments made of imported fabrics, electronic goods etc. the retention


Non-Resident Foreign Currency Deposit (NFCD) A/C : (NFCD A/C At a glance)

Authorized dealer may open F.C A/C in the name of followings persons without prior approval from Bangladesh Bank. All Bangladeshi Nationals / persons including those having duel nationals / ordinarily residing abroad may open in term bearing NFCD A/Cs.

 

Eligible persons:

 All non-resident Bangladesh nationals and persons including duel nationality & ordinarily residing abroad / working / earn abroad including self-employed, may open the account.

  • Bangladesh nationals, serving with Embassies / High Commissions / Staff of Govt. / Semi Govt. / autonomous / nationalized sectors posted / deputed abroad can open A/C.
  • Foreign Nationals residing abroad / in Bangladesh, foreign registered abroad & operating in Bangladesh / abroad.
  • Shore staff of Bangladesh shipping companies posted abroad may open the account but the crewmembers are not entitled to open such accounts.
  • Account may be opened with funds transferred from existing F.C. accounts maintained by the wage earners with the AD branch in Bangladesh.
  • Eligible persons are allowed to open such accounts with in six months of their return to Bangladesh.
  • In case of pre-matured repayment the profit amount will be forfeited.

 

Terms & Conditions :

 Account may be opened by the remittances from abroad or transfer from any F.C. A/C with any AD branch.

  1. Initially with the minimum deposits is an amount of US$ 1000/- & STG.Pound 500/- for Bangladeshis who residing / serving abroad. Also minimum deposits should be USD 25,000/- or equivalent for foreign national / companies.
  • The accounts may be maintained in US Dollar, STG. Pound, Deutsche Mark, Japanese Yen & EURO accounts are matured after one, three, six, twelve months.
  1. Profit will be paid at Euro Currency deposit rates. Profit amount is exempt from the tax payable under income tax act.
  2. If applicant is in abroad, specimen signatures of the opener duly verify by Bangladesh Mission abroad, reputed bank or any other persons known to the AD branch.
  3. A/C holder can freely repatriate the balance & profit accrued thereon, in foreign exchange to the country of residing to anywhere he chooses.

Resident Foreign Currency Deposit (RFCD) A/C:

  1. Person ordinarily resident in Bangladesh may open & maintain RFCD A/Cs with Foreign exchange brought in at the time of their return from travel abroad duly declared to custom authority in FMJ form having amount of more than US$5000/-
  2. The account may be opened UD Dollar STG, Pound, Deutsche Mark, Japanese Yen & Euro & may be maintain as long as the account holders desire.
  • Proceeds of export goods or services from Bangladesh or commission arising from business deals in Bangladesh shall not be credited to such accounts.
  1. Balance of these accounts shall be freely transferred abroad or may be endorsed in passport of the account holder for foreign travel purpose.
  2. Profit ( interest) in foreign exchange shall be payable on balances, if the deposits are for a term of not less than one month & balance is not less than US$ 1000/- or Stg. Pound 500/- or its equivalent .
  3. The rate of profit / interest shall be ¼% less than the rate at which profit / interest is paid on a balance of bank in F.C clearing A/Cs maintained with Bangladesh bank.
  • While depositing the foreign exchange the depositor shall furnish written declaration,
  • Mentioning the date of return from abroad
  • The amount of foreign exchange is not receipt against export of goods or services from Bangladesh
  • The amount of foreign exchange is not receipt against commission due from abroad arising form business deal in Bangladesh.

 

Convertible & Non-Convertible Taka A/C:
  • AD branch may open convertible Taka accounts in the names of foreign organizations/ nationals viz. diplomatic missions, UN organizations, non-profit /interest international bodies, foreign contractors & consultants engaged for specific projects under the Govt. semi. Govt. agencies & the expatriate employees of such missions / organizations who are resident in Bangladesh.
  • These accounts may be credited with foreign currency brought in or remitted from abroad or transferred from a foreign currency account or another convertible taka account. No money emanating from a business originating in Bangladesh & otherwise repatriable to Bangladesh can be credit to these accounts.
  • Account may be debited for payments in foreign currency abroad, for local expenses, for transfers to foreign currency accounts or other convertible Taka accounts or for credits to a non-convertible taka account.
  • Foreign organizations / their expatriate personnel may maintain non-convertible Taka accounts with AD branch without prior approval of Bangladesh bank.

 

Other Accounts:

 AD may maintain FC A/C of the following under certain conditions :

  1. Diplomatic Bonded Ware House licensed by the custom authority.
  2. Local & Joint Venture contracting Firms employed to execute projects by foreign / International Donor agencies.
  • Foreign national residing in Bangladesh
  1. Bangladesh nationals working with Foreign / International organization operating in Bangladesh.

REMITTANCE:

To send money from one place to another place is known as remittance. Transfer of funds on account of customers are affected by means of instruments called drafts. Transfer and Telegraphic / Telephonic Transfers, with development in transmission technology these may be different variants of a TTs. If such transfers are made within the country, these are called inland Remittance.

 

There are mainly two type of remittance:

  1. Inward Remittances &
  2. Outward Remittances.

Inward Remittances :

  1. Full particulars of remittances are recorded in the respective register properly
  2. The remittances are promptly handled and paid to the beneficiary without any delay.
  3. The exchange rates are correctly applied.
  4. All remittances payable are properly controlled through the T.Ts, D.Ds and payable registers according
  5. to the nature of remittances.
  6. Remittances are promptly dealt with and charges, if any , are recovered as prescribed.
  7. Signature on Demand Drafts and Mail Transferred are properly verified before effecting the payment.
  8. T Receipts & Demand Drafts when presented for cash payments are paid only upon proper identification.
  9. Reimbursement in respect of all inward remittances given by correspondent bank direct is closely followed up so that bank’s Nostro Accounts are credited in time.
  10. T payments are effected only if the messages are tested and that the test numbers are found to correct.
  11. All transactions are properly reported to the control under correct forms and schedule.

 

Encashment of T.C ( F. C )

Comparing the counter signature taken by the branch with the earlier signature on the face of T.C voucher is prepared converting Foreign Currency at O.D transfer buying rate of the day. Verify the passport & endorse the amount on the passport. Necessary payment is made to the party in Taka retaining the commission. The instrument / T.C is sent for collection through Head Office.

Dr.      WES Fund Purchase A/C (O.D transfer rate)

Cr.      Party’s A/C / Cash

Cr.      I / A Commission ( Tk .0.25 per US$ )

Cr.      I / A P & T A/C.

Encashment of Cash ( F.C )

Examine the currency Note carefully to be satisfied about their genuineness. Vouchers are prepared converting F.C at O.D transfer buying rate of the day. Verify the passport & endorse the amount on the passport. Necessary payment is made to the party in Taka retaining the commission.

Dr.      Cash ( Foreign Currency )

Cr.      WES Fund Held ( F.C in hand), Notional rate

Cr.      WES Fund Purchase A/C ( T.T. Buying rate )

Cr.      Party’s A/C / Cash.

 

Encashment of Draft & T.T

Verify the authenticity of the instruments with reference with the Test Key / authorized specimen signature & prepare the relative vouchers.

FDD payment :

Dr.      SIB General A/C ( Head Office )

Cr.      Party’s A/C  / Cash

Cr.      I / A Commission ( Tk .0.25 per US$ )

Cr.      I  /A  P & T

 

TT payment:

Dr.      SIB General A/C ( Head Office )        

Cr.      Party’s A/C  / Cash

Cr.      I / A Commission ( Tk .0.25 per US$ )

Cr.      I  /A  P & T

 

 

WAYS AND METHODS OF INWARD REMITTANCES :

  1. Cash foreign currency without declaration up to US$ 5000/=
  2. Foreign T.T
  • Foreign DD
  1. Mail Transfer.

 

(2) OUTWARD REMITTANCE :

Outward remittance means sale of foreign currency which constitutes from Bangladesh by T.T., M.T., F.D.D. etc, to a foreign country or local currency credited to non-resident Taka account of foreign banks or convertible Taka account and also endorsement (issue) of Foreign currency including T.C. on foreign travel purpose. Transactions of out ward remittances must be reported in T.M. Form.

Proper records of remittance transactions must be kept by the ADs for inspection by Bangladesh Bank from time to time.

 

WAYS AND METHODS OF OUTWARD REMITTENCE :

  1. By Issuance of Drafts.
  2. By Issuance of Mail Transfer.
  • By issuance of T.T.
  1. By T.C. ( Traveler Chaque )
  2. In foreign currency notes and coins. Cash dollar maximum upto US$500/- per Annum.
  3. Credit Card. ( The exporters can only enjoy credit card facilities for retention of their foreign currency in their FCAD ( Export ) A/C. )

 

WHAT ARE THE GROUNDS UPON WHICH THE OUTWARD REMITTANCES MAY BE ALLOWED ?

  1. For settlement of payment against Import letter of Credit.
  2. For travel purposes.
  • For higher studies purposes.
  1. For medical treatment purposes.
  2. For Tofel examination purpose.
  3. For pilgrim purpose.
  • Participation in Int’l Conference.
  • Training purpose.

 

Outward Remittances :

  1. Exchange Control approval for outward remittance is held where necessary and requisite exchange
    1. Control formalities are properly compiled with. Such applications should be forwarded by the AD branch by their own messengers / by post but not by their clients directly.
  2. AD branch should see whether the approval was duly signed by the authorized officer & bears the
    1. Bangladesh bank embossing seal. Applications pending with Bangladesh Bank are followed up to
    2. avoid delay.
  • Permit issued must be utilized with in the period of its validity indicated in the permits. The amount released must not be exceeding the authorized limit.
  1. Approved by TM form is remain valid for a period of three calendar months from the date of approval, other wise stated by Bangladesh Bank.
    1. Approvals excepting TM Forms remain valid for a period not exceeding 30 days from the date of approval unless stated as valid for a specified period.
  2. For payments against imports into Bangladesh, the prescribed application form is IMP Form & for other types of remittances is TM Form.
    1. Original copies of all IMP Forms, TM Forms covering remittance affected by AD branch must be submitted to Bangladesh Bank along with appropriate returns.
  3. Remittance is express in foreign currency, the correct rate of exchange has been applied.
  • The remitter’s instruction is correctly carried out and there is no delay in attending to this instruction.
  • All standing instruction for periodical remittances is properly recorded, diaries and carried out followed.
  1. The telegrams are properly worded and coded where necessary.
  2. All transaction are to be reported to the control under forms and schedules.

Issued of F.C for Travel Abroad :

 

  1. Foreign Exchange is to be issued against valid passport & confirm air ticket it must be endorsed on it.
  2. AD branch may release of foreign currency up to US$ 1000/- & up to 500/- or equivalent per person to adult Bangladesh national during a calendar year for SAARC member countries & Myanmar by air & road respectively.
  • AD branch may release of foreign currency up to US$ 3000/- or equivalent per person to adult Bangladesh national during a calendar year for the countries other than SAARC member.
  1. Unused Draft Foreign Currency Notes and Travelers Cheque are held under proper custody.
  2. In the matter of drawings on accounts with foreign correspondents the terms of the agency arrangements are strictly adhered to and reimbursement instruction etc are carefully done.
  3. For minor (below 12 years) the applicable quota will be half of adult quota.
  • Entitlement of the passport is to be checked up & branch is satisfied that foreign currency released earlier travel was utilized with the journey being actually undertaken / was duly encashed unutilized.
  • Travel entitlement may be utilized also by way of international credit cards issued in the name of the persons concerned.
  1. While releasing foreign exchange for travel purposes branch officials should ensure that
  2. The intending traveler is a client of the branch / sufficiently well known to the branch officials / to
    1. be a bonafide applicant.
  3. The intending traveler is in possession of a confirmed air ticket (where applicable) for journey to
    1. be undertaken.
  • The amount released is endorsed on the passport & air ticket with ineible ink, with signature &
    1. name of the branch embossed in the passport & air ticket.
  • Photocopy of first six pages of passport & the page recording endorsement if foreign exchange &
    1. Photocopy of Air Ticket showing name, route date of journey, endorsement of foreign exchange along with TM Form should be sent to Bangladesh Bank along with the report of transaction in the monthly return.
  • Date of departure must not be later than 15 days of exchange is issued & ticket must specify the date of departure.
  1. The purchaser must sign on the Travelers Cheques in presence of the dealing officers in case of VIP, Branch will arrange to send an officer to get the TCs signed by the purchaser in the presence.

F.C. issued to govt. / Semi govt. officials

Government order is to be obtained for Govt. / Semi Govt. officials & will release foreign exchange as per entitlement given by Ministry of finance from time to time. In such case the applicant shall be required to submit the sanction letter & competent authority order / notification / circular authorizing the travel.

 

F. C. issued to Private sector participants

 AD branch may release for actual period of seminars conferences & work shops organized by international bodies up to US$ 250/- per diem in SAARC member countries or Myanmar & up to US$ 200/- in the other countries. Photo copy of the invitation letters received by the applicants & all other documents should be kept in record in the branch for post facto inspection by Bangladesh Bank.

F. C. Issued for Medical Treatment

 Up to US$ 10,000/- or equivalent may be released for travel abroad on health grounds on the basis of recommendation of the medical board set up by the Health Directorate & cost estimate of foreign medical institutions, on prior approval from Bangladesh Bank.

F. C. Issued Debiting Convertible Taka account 

  1. C. may be issued to private individuals Govt. / Semi Govt. autonomous body officials for undertaking educational tour, attending seminars, workshops, etc abroad by debiting convertible taka account of foreign NGOs / International Bodies at their request in this case Govt. / Semi Govt. autonomous body officials should be accompanied by the permission letter of competent authority, authorizing proposed travel abroad.

Business Travel of Export & Import:

  •  Exporter – Up to US$ 6000/- or equivalent may be issued to new export, against recommendation letter from Export Promotion Bureau. For higher requirement Bangladesh Bank permission is required, applications are submitted through AD branch.
  • Importer – Entitled business travel quota @ 1% of their imports settled during the previous financial year having upper ceiling of US$ 5000/-
  • Non – Exporting producer – Non exporting producers for the local market are entitled business travel quota @ 1% of their turn over of the previous financial year as declared in their task return, having upper ceiling of US$ 5000/-

 

F. C. Issued to Foreign Nationals

 C. in TC may be issued without any limit & in cash notes up to US$ 300/- or equivalent per person against surrender of equivalent amounts in foreign currency. F. C. should be issued on production of air ticket for a destination outside Bangladesh / export cum import permits in case of travel by car & endorsed on the relative passport.

xviii.  Reconversion of unspent Taka by foreign tourist

 AD branch may allow reconversion of unspent Taka fund to foreign tourist’s o9n production of the original certificate evidencing the encashment of foreign currency bought in by the tourist. The branch while allowing reconversion will retain the original encashment certificate.

 

Accounting procedure

 (a)      CASH

Dr.       Parties A/C / Cash ( At B. C. Selling Rate )

Cr.       WES Fund Purchased A/C

Cr.       I / A Commission

Dr.       WES Fund Held @ Notional Rate

Cr.       CASH ( Foreign Currency )

(b)     T. C.

Dr.       Parties A/C / Cash ( At B. C. Selling Rate )

Cr.       WES Fund Purchased A/C

Cr.       I / A Commission ( US$ 1.00 per US$ 100.00 )

Dr.       WES Fund Held @ Notional Rate

Cr.       ABC Gen. A/C Head Office ( ID )

 

Issuance of FDD & FTT  :

 FDD Issuance

Dr.      Party’s A/C / Cash ( At B. C. Selling Rate )

Cr.             WES Fund Purchased A/C

Cr              I / A Commission on DD

Cr.             Postage

 

Dr.  WES Fund Held @ Notional Rate

Cr.  ABC Gen. A/C Head Office ( I. D. )

FTT Issuance:                 

Dr.  Parties A/C / Cash ( At B. C. Selling Rate )

Cr.  WES Fund Purchased A/C

Cr   I / A Commission on TT

Dr.      WES Fund Held @ National Rate

Cr.       ABC Gen. A/C Head Office ( I. D. )

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