Top-notch service and dedicated teams will attract offshore depositors
The deputy managing director of Transaction Banking, Debt Capital Market and Financial Institutions at Prime Bank PLC says the bank’s services, dedicated teams and ease of opening and maintaining accounts will help it attract offshore depositors
Prime Bank, with its long history of delivering consistent and superior financial performance, has established an impeccable reputation both nationally and globally.
This success is built on a foundation of strong corporate governance, innovative tech-based products and solutions, and a dedicated workforce. The bank also operates five subsidiaries, three of which are in advanced economies such as the UK, Singapore, and Hong Kong, where they operate commendably under stringent financial regulations.
Investors recognise the bank's achievements, receiving a 17.5% cash dividend for the last three consecutive years—an impressive feat matched by only three other banks in 2023.
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Prime Bank is a dominant player in the corporate banking space, with a robust offshore banking business operated through three branches in the EPZs of Dhaka, Narayanganj, and Chattogram.
The bank's OBU asset book is valued at $487 million, financed by foreign currency deposits and loans. The funds are provided by reputable institutions like the Asian Development Bank, International Finance Corporation, British International Investment, Islamic Development Bank, US Department of Agriculture, FMO and large international banks.
These lenders' rigorous due diligence before lending underscores their confidence in Prime Bank's capability to use funds profitably and repay on time. Individual and corporate depositors can comfortably place their deposits in the bank's offshore banking unit assured of competitive returns and on-demand repatriation of their funds.
Prime Bank has streamlined the account opening and fixed deposit processes via its online portal, ensuring proper due diligence and a seamless customer experience.
The recently enacted Offshore Banking Act 2024 provides tax-free income for depositors in OBU, making yields on deposits in offshore banking units very attractive compared to other jurisdictions. These deposits are easily repatriable and free from taxes and excise duties, offering significant benefits to foreign institutional investors.
They can transfer funds from offshore to onshore accounts as needed, avoiding timing gaps and transfer costs. This flexibility helps institutional depositors mitigate currency conversion risks.
Prime Bank aims to raise awareness among non-resident individuals and corporate entities about these opportunities, especially targeting NRBs and white-collar wage earners.
In the face of current economic headwinds, it is crucial to demonstrate a commitment to strong corporate governance and work out ways to improve credit ratings of the banks. This helps maintain confidence among non-residents towards investments in Bangladeshi banks.
The Offshore Banking Act, enacted by the Parliament of Bangladesh on 14 March 2024, allows both Bangladeshi and foreign companies and individuals to take advantage of OBU investment opportunities. Under the new policy, depositors are exempted from taxation on their interest income and excise duty. Foreign investors can repatriate their invested funds and earned interest at any time.
Offshore banking enables a country to source foreign currencies at a much faster pace than any other conventional way as Investors always look for options to gain optimum return of their investment with tax benefit. It helps to mobilise resources from all over the world.
The country can utilise the bulk deposits maintained in the form of long term investment in OBUs to support its international trade finance. Also, the part of the deposits transferred to domestic banking to meet local expenses or for investments in local currency ultimately injected into the economy to boost the FX reserve. Thus the overall foreign trade gets fueled with the inflow of funds through offshore banking.
Many emerging economies have been tremendously benefited from the banking operations under such special financial regulations. International Finance Center in Dubai, Gift City in India and many others in different parts of the world are proven to be favourite investment destinations of foreign investors.
