BB allows merchants to retain 15% of foreign currency receipts from card payments

Bangladesh Bank has introduced a new facility, allowing hotels, shopping malls, retail outlets and other business establishments to retain 15% of their foreign currency receipts from sales to foreign visitors through internationally issued cards and other payment instruments.

Under a circular issued on 25 October, Authorised Dealer (AD) banks may allow the concerned merchants to retain up to 15% of foreign currency receipts realised through acquiring services in Foreign Currency (FC) accounts maintained in their names. The remaining 85 percent shall be converted into taka.

The initiative aims to encourage sales of goods and services to foreign visitors by facilitating international payments while providing businesses with access to foreign currency to meet their legitimate foreign exchange requirements.

According to the circular, foreign currency retained in these accounts may be used to settle legitimate foreign exchange obligations arising from current account transactions, including payments through international cards, in accordance with applicable foreign exchange regulations.

The circular also requires AD banks to ensure that the concerned merchants have appropriate arrangements for accepting payments through internationally issued cards and other admissible payment instruments.

Industry insiders expect the new facility to support businesses serving foreign visitors by facilitating the settlement of eligible foreign currency expenses through the banking channel. It is also expected to help tourism-related businesses and other merchants benefit from international payment systems while ensuring that the major portion of their foreign currency earnings is converted into taka.