Call for overhaul of archaic forex law
Commerce Minister Faruk Khan yesterday agreed with businessmen, bankers and experts to change the decades-old Foreign Exchange Regulation Act (FERA) immediately to tap the growth potential of the country.
The minister and the businessmen said unanimously that FERA is affecting the country's economic growth.
Khan said he finds no reason why Bangladeshi entrepreneurs cannot invest in other countries for their business expansion.
“Our entrepreneurs have the capacity to invest in other countries. I'll bring the issue to the prime minister's notice,” said the minister while addressing a dialogue on new foreign exchange regulations to facilitate trade and investment held at Bangabandhu International Conference Centre.
The International Chamber of Commerce Bangladesh (ICCB) organised the dialogue, chaired by its President Mahbubur Rahman. Mamun Rashid, chairman of the ICCB standing committee on banking technique and practices, presented a keynote paper.
Experts, top businessmen and bankers who took part in the discussion demanded immediate reforms to the FERA that was passed by the British government in 1947 when there was no internet, online transactions and back-to-back LC.
The law regulates the country's payments, dealings in foreign exchange and securities and the import and export of currency and bullion. Though India and Pakistan have brought significant changes to the law, Bangladesh is still hanging on to the archaic legal instrument.
Eminent lawyer barrister Rafique ul Haque said the existing laws focus on protecting foreign exchange, not on facilitation of business.
“This attitude needs to be changed. It is high time that the law is amended,” said Haque. “Someone must take the responsibility.”
He, however, was sorry not to see any representative of the Bangladesh Bank and finance ministry who are the main stakeholders in formulation of these laws and their implementation.
ICCB chief Mahbubur Rahman said it is essential to have the law reformed in such a way that it becomes user-friendly and helps the growth and development of the economy.
“The law should allow the Bangladeshi investors to set up industries and offices abroad for expansion of their business,” said Rahman.
Amjad Khan Chowdhury, president of Metropolitan Chamber of Commerce and Industry, said the old FERA is holding Bangladesh's economy back. He criticised the central bank for not allowing capital account convertibility.
“The country's food deficiency can be addressed by producing grains in foreign lands, such as India,” said Chowdhury.
Former president of the Federation of Bangladesh Chambers of Commerce and Industry Annisul Huq said provisions of the FERA such as discounting, bill of entry and convertibility are real troubles for businessmen.
Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers sand Exporters Association, said he is confused about how much foreign currency a businessman can carry. He asked the government to standardise the law.
Former chairman of the National Board of Revenue Abdul Mazid said context is a vital issue for formulation of a law. “FERA was formulated considering the 1947 realities and context,” he said.
Zahid Hossain, a senior World Bank official, said Bangladesh has achieved tremendous success in exports and remittances despite constraints in the FERA. He said the country could have gained more with an updated relevant law.
“The 1947 FERA needs to be revamped totally,” said Helal Ahmed Chowdhury, managing director of Pubali Bank.
Mamun Rashid said Bangladesh is exhausted with the changes it brought from time to time through circulars in the FERA. Now a total revision is needed, he added.