BB relaxes rules for businesses to pay for fees abroad

Bangladesh Bank yesterday eased the rules for the cross-border payment of fees for the services availed by businesses from external sources.

The central bank so far allowed businesses to remit up to one per cent of their annual sales to pay for the training and consultancy services bought from abroad.

Yesterday, the BB, in a circular, said it widened the scope of the payments of fees for services such as audit, certification, commissioning, testing and valuation- a move that will reduce the hassles of firms.

"From now on, businesses will be able to pay for the fees up to one per cent of their annual turnover. Earlier, they had to get our approvals to remit the money for the services other than payments for training and consultancy," said a senior official of BB.

However, this will exclude the payments requiring permission from

the authorities,including Bangladesh Investment Development Authority, for the remittances of royalty, technical knowledge or assistance, and franchise fees, the official said.

"This is a welcoming move. It will reduce our hassles. However, the central bank should review the one per cent limit because firms with low turnover will find it difficult to avail the benefit if it is not revised upward," said a top official of a multinational company.

The BB also waived companies from the obligation of getting approvals for payments of maintenance or support fee for software bought from external sources.

Earlier, companies had to get approval from the BB to pay, for the first time, for the maintenance fee for the software.

The BB official said that the central bank is continuously updating regulations to facilitate businesses.

"The new rules will help banks support corporate customers for remitting legitimate payments abroad."