Rewarding Saving solutions for depositors

Mohammad Feroz Hossain
Managing Director and CEO
Exim Bank

Offshore banking is a time-honored mechanism employed by Bangladesh Bank to attract foreign currency and recycle it into the economy in the form of investments. It facilitates a country's exports and imports and plays a key role in the overall development of the financial sector. During the ongoing foreign currency crisis, offshore banking can significantly contribute to building up forex reserves. We have successful examples nearby, such as Mauritius, which has ensured substantial foreign currency inflows through offshore banking operations.

It has been ten years since we started our offshore banking unit. Initially, we had to rely heavily on Export Processing Zone (EPZ) or A-category clients for foreign currency deposits, which limited our scope. As a result, borrowings became the mainstay of our offshore banking operations. However, recent central bank policies regarding offshore banking have opened up a broader market for a larger pool of foreign currency deposits. Now, any non-resident Bangladeshi can open foreign currency fixed-term deposit accounts with any Bangladeshi offshore banking unit, with the option to repatriate the principal amount along with the interest/profit back to their country of residence. Furthermore, the interest/profit earned is tax-free. This policy is highly encouraging for attracting foreign currency deposits to the country.

Currently, commercial banks with offshore banking units are actively marketing their deposit products. At the same time, the country is undergoing a correction and reconstruction in the banking sector, particularly concerning its substantial classified loans, asset flight, and monopolization in the banking business. However, once the offshore fixed deposit products are successfully marketed alongside proper implementation of policy initiatives, we are optimistic that non-resident Bangladeshis (NRBs) will recognize these savings options as beneficial for both themselves and their homeland.

To fully utilize the potential of offshore banking, EXIM Bank is encouraging the Bangladeshi community in the UK and Hong Kong to open foreign currency deposit accounts with our bank through our exchange houses and finance companies in those regions. Additionally, we are developing an online portal for opening and operating foreign currency accounts from abroad. Within the country, we are deploying our regular marketing strategies to attract foreign currency deposits to our offshore banking units. We are experiencing an increasing response from companies with corporate deposit volumes, as well as from individuals with retail deposits. Several large companies have also committed to opening accounts with us. We are hopeful that our bank can thrive on foreign currency deposits in no time.