Ensuring safety through governance and compliance

Selim R.F. Hussain
Managing Director &CEO
BRAC Bank

Since the launch of our Offshore Banking Unit (OBU) at BRAC Bank, the experience has been highly encouraging and rewarding. The OBU has enabled us to expand our services to non-resident clients and tap into new business opportunities in foreign currency. We've seen strong interest from expatriates, reflecting the trust in BRAC Bank's stability and global reach.

We've seen a surge in customers using the OBU for savings and investment purposes, and the feedback has been very encouraging. This service has helped individual customers diversify their financial portfolios, manage their wealth efficiently, and take advantage of opportunities in both local and international markets. We look forward to scaling this service in the years to come.

BRAC Bank has successfully operated its OBU since its launch in November 2009, extending foreign currency lending facilities to various sectors, including short-term trade financing and long-term project financing. As of June 2024, the asset size stood at USD 708 million, primarily funded by overseas borrowings and corporate deposits.

The bank provides safety to the depositors with its highest standard of governance and compliance. We have the highest domestic and international credit ratings among all banks in Bangladesh. Currently, we are offering the best interest rates for offshore banking fixed deposit products, availing the option to deposit in three currencies (USD, GBP, and EURO). Savings can start with as little amount as 500 dollars without any upper limit. Some of the facilities are zero account maintenance fee; easy repatriation abroad, waiver from deduction of withholding tax on interest-earning and excise duty, 24/7 digital banking, etc.

As customers deposit foreign currencies, the OBU's foreign currency balance can significantly enhance the bank's FX liquidity, facilitating a wider range of foreign trade financing, especially during the ongoing FX reserve challenges. This will make foreign currency management more efficient and cost-effective.

However, building trust among customers may pose challenges. In today's era of technological advancement, concerns over cybersecurity, compliance, and governance are paramount. Addressing these challenges requires collaborative efforts from government bodies, the central bank, and commercial banks to strengthen regulatory compliance, enhance transparency, improve banking infrastructure, and promote investment opportunities for non-residents.

The directives we expect from the central bank to ensure the long-term success of offshore banking include regulatory clarity and flexibility, foreign currency liberalization, and the development of specialized expertise. By implementing these directives, the offshore banking industry would be better positioned to contribute to economic growth and compete globally.