Meeting the diverse needs of customers

Md. Quamrul Islam Chowdhury
Managing Director
Mercantile Bank

Offshore banking is becoming a vital avenue for banks in Bangladesh to attract foreign currency deposits, thereby facilitating investments and international trade. This sector has the potential to alleviate the current foreign currency crisis by providing much-needed liquidity and helping stabilize currency management.

In Bangladesh, offshore banking operations began in 1985, with Mercantile Bank launching its Offshore Banking Units on July 4, 2010. The bank operates two units: the Principal Offshore Banking Unit in Dhaka and the Agrabad Offshore Banking Unit in Chattogram. Both units are overseen by the Offshore Banking Division at the Head Office, in accordance with guidelines from Bangladesh Bank. Currently, the bank's Offshore Banking Division holds assets of approximately USD 77 million, supporting 450 accounts. Funding comes from reputable financial institutions, large international banks, and the bank's own resources.

The bank offers a range of deposit products structured to meet the diverse needs of its offshore banking customers. The Savings Account is designed for individuals who wish to earn interest on their deposits while maintaining easy access to their funds. Our Current Account is ideal for businesses and individuals requiring frequent transactions, with no withdrawal limits. Additionally, the Fixed Deposit Receipt Account (OB FDR Account) targets customers looking to invest their funds for a fixed term at competitive interest rates. We have also recently introduced International Banking (IB) Accounts, tailored for clients with international transactions and foreign currency management requirements.

With a focus on strengthening the supply of foreign currencies—especially crucial as outflows exceed inflows—offshore banking could be a significant source of foreign currency reserves. Given Bangladesh's import-dependent economy, where the local currency continues to devalue, offshore deposits are essential. By encouraging offshore services, the banking sector has the potential to attract $50 to $100 billion from the large number of Bangladeshis working and conducting business globally.

To make this opportunity flourish, building trust among potential customers is crucial. Addressing challenges such as the country's credit rating, an uncertain political landscape, financial scams, and corporate governance issues is key to fostering confidence in offshore banking services and ensuring their successful growth in Bangladesh. A comprehensive master plan is in place to promote our offshore products and target potential customers in major remittance-sending countries in Europe, America, and the Middle East. These strategies aim to strengthen our presence in the offshore banking sector, attract offshore deposits, and facilitate investments and international trade.