Banks barred from transferring forex to offshore branches

Bangladesh Bank (BB) yesterday barred banks from transferring foreign currency to their offshore units, saying it was to tackle shortages at home and reduce dependency of the units abroad on those back home.

The central bank issued a notice asking banks to make adjustments regarding funds transferred within this year.

From 2020, banks were allowed to transfer a maximum 30 percent of their regulatory capital in foreign currency from domestic units to their offshore units.

Earlier, there was no limit on transferring or mobilising funds in the offshore banking units from those within the country.

A senior official of the central bank said the BB had observed that many banks were transferring foreign currency to their offshore banking units excessively.

As a result, an imbalance in the demand and supply was created along with a shortage of foreign currency in the local market, he added.