Bangladesh Bank introduces 'Non-Resident Convertible Taka Account' for expatriates

The Bangladesh Bank has introduced a new banking facility for expatriate Bangladeshis, allowing them to open Non-Resident Convertible Taka Accounts (NRCTA), aiming to encourage remittance inflows through formal channels, boost investment and expand offshore banking activities.

In a circular issued today (23 June), the central bank said expatriates would be able to deposit remitted funds in their accounts and freely repatriate both the principal amount and any interest or investment income earned.

The central bank has also allowed funds held in these accounts to be used for a range of domestic transactions, including investments and lending to certain foreign-owned industrial enterprises operating in Bangladesh's specialised economic zones.

A senior central bank official told The Business Standard that expatriates will be able to open non-resident convertible current, savings or fixed deposit accounts through offshore banking units using funds remitted through banking channels.

"The accounts may also receive transfers from other non-resident accounts, interest or profit income, investment earnings, refunds from share subscriptions and other approved foreign exchange-related receipts," the official added.

According to the circular, the initiative has been taken in response to growing remittance inflows and to create new opportunities for expatriates to participate in the country's economy.

Both the deposited funds and accrued interest or profits will remain fully repatriable.

In addition, account holders will be allowed to use the funds for local payments, conversion into foreign currency accounts, foreign direct investment (FDI), and portfolio investments in Bangladesh.

The funds can also be used to provide taka-denominated loans to Type-A industrial enterprises operating in specialised economic zones, which are fully foreign-owned entities.

However, such loans may only be used for approved operating expenses, including salaries, wages and utility bills. Repayment must be made from the export earnings of the borrowing companies.

The central bank has also permitted banks' domestic banking units to provide loans against deposits held in these accounts to expatriates or their nominated beneficiaries.

These loans may be used for personal or business purposes, although investments in agriculture, forestry and housing sectors will not be permitted.

The circular further allows account holders to make non-repatriable investments in Bangladesh and purchase residential property for personal use.

Another central bank official said the new account framework would strengthen the financial intermediation of remittances, enhance offshore banking activities and create a structured platform for expatriate Bangladeshis to invest in the country's economy.

The official added that the facility would also help improve liquidity support for foreign-owned export-oriented industries through the newly permitted lending mechanism.