First Security to buy floor space in Italy for exchange house

At a time when many are closing down their foreign exchange house operations for mounting losses, First Security Islami Bank has decided to spend a hefty sum to buy a little space in Rome to put up its exchange house.

The bank will purchase a floor space measuring 90.30 square metres (nearly 972 square feet) in the Italian capital for €360,000 (equivalent to Tk 3.20 crore), according to a statement posted on the Dhaka Stock Exchange website yesterday.

The exchange house, which is named First Security Islami Exchange Italy, now has to take approval from the Bangladesh Bank to transfer the sum.

The bank got the approval from the central bank to open the exchange house for €600,000 (Tk 5.31 crore) in 2009, the first Bangladeshi bank to do so.

State-owned Janata Bank followed suit in 2010, expending €268,300 euro (Tk 2.37 crore), according to central bank data.

Bangladesh received $396 million in remittance from Italy in the first ten months of the fiscal year.

The BB has so far allowed banks to open 67 exchange houses overseas to facilitate remittance.  Of them, 35 are now in operation, 10 closed and 22 did not set up shop at all.

Since most exchange houses did not turn out to be profitable ventures, banks are now concentrating their focus on a business model similar to agent banking, bankers said.

The BB is allowing banks to go for agency agreement for opening exchange houses to serve non-resident Bangladeshis, a complete U-turn from its earlier stance.