Bangladesh* PROFILE CONTENTS }} INTRODUCTION 2 LEGAL AND REGULATORY
4
TAXATION 7 BANKING 11 PAYMENT INSTRUMENTS
12
PAYMENT SYSTEMS
14
CASH MANAGEMENT
15
ELECTRONIC BANKING
17
TRADE FINANCE
18
USEFUL CONTACTS
20
* Guides specifically designed for treasury managers offering a detailed picture of the banking and cash management arrangements for an extensive range of locations. Please note the information is of a general nature only and is subject to change. It does not constitute financial, legal, tax or other professional advice.
Country Profile
BANGLADESH
INTRODUCTION }} General Capital/Other major cities: Area: Population: Languages: Currency: Country telephone code: Weekend: National holidays: Source: www.goodbusinessday.com.
Business hours: Banking hours: Stock exchanges: Leading share indices:
Dhaka/Chittagong, Khulna, Rajshahi 143,998km2 166.28m Bangla (also known as Bengali), English Bangladeshi taka (BDT) 880 Friday and Saturday 2nd half 2015 — 5, 24–26 Sep*, 23, 24 Oct*, 16, 24*, 25, 31 Dec 2016 — 21 Feb, 17, 26 Mar, 14 Apr, 1, 21* May, 1, 3, 6, 7 Jul*, 15 Aug, 12–14 Sep*, 11 Oct*, 12*, 16, 25, 31 Dec 09:00–17:00 (Sun–Thu) 10:00–16:00 (Sun–Thu) Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE) DSE 20 Index, CSE 30 Index * The date shown may vary by plus or minus one day. These dates are derived by converting from a nonGregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon.
Government Legislature }}Parliamentary democracy with a unicameral National Parliament (Jatiyo Sangsad). }}National Parliament – 300 members elected to serve five‑year terms. }}The president is elected by the National Parliament every five years. Head of state }}Abdul Hamid, president since 24 April 2013. Political leader }}Sheikh Hasina, prime minister since 6 January 2009.
Sectoral distribution of GDP (% of GDP) Agriculture Industry Services
17.2% 28.9% 53.9% (2013 estimate)
Please note that the information contained in this document is of a general nature only and is subject to change whether for economic, political, social or other reasons. It is not intended to be comprehensive and does not constitute financial, legal, tax or other professional advice on which you should rely. Accordingly if you are planning any business activity in the country or taking, or refraining from any action on the basis of the information in this document, you must obtain your own independent professional advice. The materials contained in this document were assembled in February 2015 (unless otherwise dated) and were based on the law enforceable and information available at that time. We make no representations, warranties or guarantees (express or implied) that the information in this document is complete, accurate or up to date. We will not be liable for any liabilities arising under or in connection with the use of, or any reliance on, this document or the information contained within it.
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BANGLADESH
Economy
2009
2010
2011
2012
2013
Exchange rate* (BDT/USD)**
69.039
69.649
74.152
81.863
5.00
5.00
5.00
NA
NA
Consumer inflation*** (%)
+ 5.4
GDP volume growth*** (%)
+ 5.7
GDP (BDT bn)
6,148
GDP (USD m)
89,051
Interest rate (discount rate)**(%) Unemployment (%)
GDP per capita (USD) BoP (goods/services/income) as % GDP
2014
2015
Q2
Q3
Q4
Year
Q1
78.103
77.644
77.483
77.702
77.642
77.824
5.00
5.00
5.00
5.00
5.00
5.00
NA
NA
NA
NA
NA
NA
NA
NA
NA
+ 8.1
+ 10.7
+ 6.2
+ 7.5
+ 7.3
+ 6.9
+ 6.3
+ 7.0
NA
+ 6.1
+ 6.7
+ 6.2
+ 6.0
NA
NA
NA
NA
NA
6,943
7,967
9,181
10,380
–
–
–
NA
–
99,688 107,441 112,156 132,900
–
–
–
NA
–
596
660
703
725
849
–
–
–
NA
–
– 8.3
– 10.6
– 11.9
– 10.2
– 9.1
–
–
–
NA
–
* Official rate. ** Period average. *** Year on year.
Sources: IMF, International Financial Statistics, May 2015 and 2014 Yearbook.
Country credit rating Fitch Ratings rates Bangladesh for issuer default as: Local currency rating
Term
Foreign currency rating
Short
–
B
Long
BB –
BB –
Long-term rating outlook
Stable Source: www.fitchratings.com, June 2015.
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BANGLADESH
LEGAL AND REGULATORY }} Central bank }}Established in 1971, Bangladesh Bank operates in accordance with the Bangladesh Bank Order of 1972 and its amendments.
Bank supervision }}Bangladesh Bank supervises the banking sector within Bangladesh. }}The Microcredit Regulatory Authority (MRA) supervises non-government microfinance institutions.
Resident/non-resident status }}A company is considered resident in Bangladesh if it is incorporated in or has its place of effective management and control in Bangladesh.
Bank accounts }}Foreign exchange accounts in USD, EUR, GBP or JPY can be held by residents both domestically and abroad. If operated domestically, these accounts cannot be credited with proceeds from exports or commissions from business deals. Resident domestic currency (BDT) accounts cannot be held abroad, but authorised dealers can open convertible BDT accounts for foreign nationals and organisations engaged in government projects or for employees of these organisations residing in Bangladesh. }}Non-resident bank accounts are permitted in both foreign and domestic (BDT) currency. Non-resident foreign exchange accounts can be held in USD, EUR, GBP or JPY. A non-resident investor’s taka account (NITA) can also be opened with the help of an authorised dealer using foreign currency remitted from abroad. Non-resident domestic currency accounts are freely convertible into foreign exchange. }}Interest can be offered on savings accounts. }}Overdraft facilities are available to residents and non-residents.
Reporting }}All transactions between resident and non-resident companies must be reported to Bangladesh Bank on a monthly basis for balance of payments purposes. }}Banks are responsible for submitting transactions data to Bangladesh Bank on behalf of their clients.
Exchange controls }}Bangladesh is a member of the South Asian Association for Regional Cooperation (SAARC). }}Bangladesh is a member of the Asian Clearing Union (ACU), which aims to facilitate payments and promote trade among member countries. The ACU comprises Bangladesh, Bhutan, India, Iran, Myanmar, Nepal, Pakistan and Sri Lanka. Transactions between Bangladeshi residents and residents of other ACU member countries are carried out in AMU dollars (equivalent to the USD). }}Bangladesh has established a bilateral payment arrangement with Myanmar. }}The Bangladeshi taka (BDT) is Bangladesh’s official currency. }}No exchange tax is applied to the currency and no exchange subsidy is available. }}Forward foreign exchange transactions are permitted in accordance with international practices.
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BANGLADESH
}}Exchange controls are administered by Bangladesh Bank. }}Proceeds from exports are required to be repatriated within four months of the shipment date, unless Bangladesh Bank approves a longer repatriation period. Ninety per cent of export proceeds are required to be surrendered by exporters to authorised dealers (50% in the case of export proceeds from merchandise and computer services). Foreign and local companies in export processing zones (EPZs) are permitted to hold 100% and 80% of export proceeds respectively in foreign currency accounts. Companies in the ready-made garment sector located in EPZs are permitted to retain 75% of export proceeds in foreign currency accounts. }}Non-residents cannot issue securities in Bangladesh. }}Residents require authorisation from the Securities and Exchange Commission to issue securities abroad. }}Approval from Bangladesh Bank is required to defer export payments for periods over 120 days. }}Resident industrial companies require prior authorisation from the Board of Investment to obtain financial credits from non-residents or to defer import payments for periods over 360 days. }}Residents are permitted to use commercial credit from non-residents for importing raw materials (up to 180 days) and capital machinery (up to 360 days) without prior central bank approval. }}Resident banks are not permitted to offer loans to non-residents or to lend foreign currency without prior approval from Bangladesh Bank. }}Personal loans between residents and non-residents are not permitted. }}All outward and inward investment (except in the case of inward direct investment in the industrial sector) requires approval.
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Anti-money laundering/counter-terrorist financing Supplied by BCL Burton Copeland (www.bcl.com). Data as at January 2015.
}}Bangladesh has implemented anti-money laundering legislation (Money Laundering Prevention Ordinances of 2007, 2008 and 2012, the Money Laundering Prevention Act of 2009 and the Prevention of Terrorism Act of 2009, as amended 2011). Bangladesh Bank has issued a number of Circulars relating to compliance with the Money Laundering Prevention Act. Associated Guidance Notes were also published by the Financial Intelligence Unit and Bangladesh Bank in September 2012. }}Bangladesh is a member of the Asia/Pacific Group on Money Laundering (APG). }}Bangladesh has established a financial intelligence unit (FIU) operating within its central bank. }}Account opening procedures require the formal identification of the account holder. However, Bangladesh does not have a national identity card, and because the vast majority of Bangladeshis do not have a passport, it is reported that there are difficulties in enforcing customer identification requirements. }}Identity must be verified before a one-off transaction or series of linked transactions of BDT 5000 or more is undertaken. }}For corporate accounts of companies incorporated outside Bangladesh, documents attested by the Bangladesh embassies/high commissions in the respective countries should be submitted. }}Financial institutions in the broadest sense are required to report suspicious transactions to the FIU at Bangladesh Bank. }}Banks are required to report cash transactions exceeding BDT 700,000 to Bangladesh Bank. }}Bangladeshis are not allowed to carry cash in excess of BDT 3000 out of the country, and while there is no limit on the amount of currency that may be brought into the country, amounts over BDT 500,000 must be declared to the customs authorities within 30 days. }}All records must be kept for a minimum of five years after the end of the business relationship.
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TAXATION }} All tax information supplied by Hoda Vasi Chowdhury & Co, an independent correspondent firm to Deloitte Touche Tohmatsu (www.deloitte.com) and Deloitte Highlight, 2015.
Resident/non-resident }}Companies are resident in Bangladesh if they are incorporated or registered in Bangladesh, or if their control and management are based wholly in the country. }}Companies that are not deemed resident have non-resident tax status.
Tax authority }}National Board of Revenue (NBR).
Tax year/filing }}A company is normally assessed on its income year, which is generally the 12-month period (or part thereof, in the case of a new business or a discontinued business) ending 30 June (31 December for banks). The year of assessment starts on 1 July immediately after the income year. }}A tax return is due by 15 July following the end of the income year, or within six months of the end of the income year, whichever is later. }}A ‘complete and correct’ return of income, that shows no loss, income less than the amount last assessed or a refund may be accepted as it is by the tax authorities, without hearing. }}Any taxpayer can opt for the universal self-assessment procedure under which the acknowledgement slip is deemed to be an assessment order (as opposed to a hearing). Returns filed under this procedure may still be subject to a possible audit by the NBR, at its discretion, within 24 months from the end of the relevant assessment year, but not later than 15 months from the end of the month of submission of the return. }}Based on the latest tax assessment (provisional or final) as completed by the tax authorities, a company is required to pay advance tax in four equal instalments by 15 September, 15 December, 15 March and 15 June of the financial year if income exceeds BDT 400,000. A company can pay advance tax based on its own estimate of income when this is lower than the latest assessment. The final payment is made when filing the tax return. }}Consolidated returns are not permitted; each entity must file a separate tax return.
Corporate taxation }}Resident companies are taxed on their worldwide income. }}Non-resident companies are taxed on their Bangladesh income only. }}Corporate tax rates are: }}Publicly traded companies (PTCs): 27.5% }}PTCs declaring a dividend of less than 10% of paid-up share capital: 35% }}Banks, insurance and financial service companies: 42.5% }}Cigarette manufacturing companies: 45% (40% if the company is publicly traded) }}Mobile phone operator companies: 45% }}All other companies: 35%. }}PTCs failing to pay a dividend to their shareholders within the prescribed time limit (determined by the Security Exchange Commission (SEC)) are taxed at a rate of 35%.
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}}PTCs paying dividends of more than 30% of their paid-up share capital receive a rebate of 10% of their tax payable. }}Mobile phone operators pay tax at a rate of 40% if converted to a PTC by issue of at least 10% of the operator’s paid-up capital in an initial public offering (IPO), of which the pre-IPO placement does not exceed 5% of the paid-up capital. }}There is no surtax. }}A minimum tax is imposed at a rate of 0.53% on the gross receipts of a company of more the BDT 5 million, i.e. turnover and/or all other receipts, irrespective of profit or loss if that is higher than the corporate tax liability. }}Losses can be carried forward for up to six years and can be set off against similar income of a business. Losses from a speculative business or under the heading of capital gains (exceeding BDT 5,000) can be carried forward for up to six years and be set off against similar income/capital gains. The carryback of losses is not permitted. Financial instruments }}There are no specific tax rules for financial instruments. Interest and financing costs }}There are no specific tax rules regarding interest and financing costs. Foreign exchange }}Foreign exchange differences are treated as intrinsic to and embedded in the primary or underlying transaction. }}Customs laws prescribe a special mode of conversion rates applicable to ascertaining the collection of tax at source on the value of imported goods. }}Taxable profits and tax liabilities need to be reported in the BDT.
Capital gains tax }}Capital gains are taxed as income at a rate of 15%. }}Gains from the sale of government securities are exempt from income tax, as are gains from the sale of shares of companies listed on the Bangladeshi stock exchange(s) (CSE or DSE). }}Capital losses (exceeding BDT 5000) can only be used to offset capital gains. Such losses can also be carried forward for up to six years.
Withholding tax (subject to tax treaties) Payments to:
Interest
Dividends
Royalties
Other income
Resident companies
5%/10%/15%
20%
10%
5%/10%
Non-resident companies
5%/10%/35%
20%
10%
10%/15%*
* Technical service fees paid to a non-resident are subject to a 10% withholding tax, unless the rate is reduced under a tax treaty. The rate increases to 15% if a tax identification number is not made available.
}}The remittance of profits abroad by a branch of a foreign company is subject to a branch profits tax of 20%. }}Rental income on plant and machinery paid to a non-resident is subject to a withholding tax of 5%.
Tax treaties/tax information exchange agreements (TIEAs) }}Bangladesh has concluded more than 30 tax treaties.
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Net worth tax }}There is no tax on net worth or capital duty.
Thin capitalisation }}There are no thin capitalisation rules.
Transfer pricing }}OECD-type transfer pricing provisions came into effect on 1 July 2014. The definition of ‘associated enterprise’ extends beyond a shareholding or management relationship, as it includes some deeming clauses. A taxpayer that engages in international transaction(s) exceeding BDT 30 million is required to maintain documentation and provide a certificate (in a prescribed format) from a chartered accountant that sets out the details of related party transactions, as well as the methods used to determine an arm’s-length price.
Anti-avoidance }}Under the substance-over-form principle, the tax authorities may recharacterise a transaction that was entered into to avoid tax or where the transaction does not have substance, or may disregard a transaction that has no economic substance.
Stamp duty }}Financial instruments, real property and other specified transactions in Bangladesh attract stamp duties that are levied under the Stamp Act, 1899. }}Rates vary from 0.2% to 5%, depending on the type of document and the value of consideration. }}Transfers of shares in public companies listed on a stock exchange are exempt from stamp duty. Transfers of other shares are liable to stamp duty at a rate of 1.5% of the consideration.
Other taxes }}Transfers of immovable property are taxed at 5% of the deed value of the transfer documents, and this is treated as a final discharge of the tax liability on the transfer. Capital gains are not taxable in such cases. }}Imports attract a pre-shipment inspection fee (PSI) at a rate of 1% other than on dispensed items. Dispensed items are those that are exempt from PSI. }}Immovable property held in municipal areas is subject to an annual (holding) tax at rates of 15–17%. }}The annual municipal trade licence fee varies between BDT 50 and BDT 10,000.
Cash pooling }}Bangladesh has no specific tax rules for cash pooling arrangements.
Sales taxes/VAT/excise (incl. financial services) }}VAT is levied on the supply of goods and services and on imports. }}The standard VAT rate is 15%. }}There are varying rates of truncated VAT (1.5–9%) on certain specified services, commercial importers and on traders. }}Exports are zero rated. }}If annual turnover is below BDT 8 million, there is scope for opting to pay turnover tax (TOT) at a rate up of 3%.
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}}Luxury and ‘socially undesirable’ goods or services are subject to supplementary duty (SD) at rates of 20–500%.
Real estate tax }}See Stamp duty section.
Financial transactions/banking services tax }}There are no specific financial transactions/banking services taxes in Bangladesh.
Payroll and social security taxes }}There are no social security taxes or payroll taxes in Bangladesh. }}Employees are subject to monthly/quarterly tax deduction at source (TDS) and payment of terminal (balance) tax. }}However, if the employer bears the employee’s tax obligation on its compensation payable, the employer is entitled to charge the tax paid in its books as an employee cost, and the employee will not be required to pay any further tax on such emoluments, nor would there be any possibility of ‘tax-ontax’, i.e. no grossing-up exercise is required.
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BANKING }} Major banks
Total assets (USD millions) 31 December 2013
Bank Sonali Bank
10,031
Janata Bank
7,308
Islami Bank Bangladesh
6,921
Agrani Bank
5,506
Prime Bank
3,118 Source: www.accuity.com, June 2014.
Overview }}There are 56 scheduled banks (with procedural endorsement of the government) operating in Bangladesh: four state-owned commercial banks, four state-owned specialised development banks, 39 privately owned domestic commercial banks and nine foreign commercial banks. }}There are also four non-scheduled banks (banks unable to perform all functions of scheduled banks), 31 non-bank financial institutions (15 of which are joint ventures with foreign participation) and 649 microfinance institutions. }}The country’s top five banks accounted for 33.6% of the banking sector’s total assets at the end of 2013; the top ten accounted for 47.9% of total assets. State‑owned commercial banks (Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank) account for approximately 26% of the banking sector’s total assets. }}In 2013, Bangladesh Bank awarded licences to five new private commercial banks, including two with non-resident Bangladeshi ownership. }}There are eight privately owned domestic Islamic banks in Bangladesh. A further ten commercial banks, including three foreign banks, offer branchbased Islamic banking and six banks, including two state-owned banks, have Islamic windows. The eight Islamic banks control approximately 17% of the banking sector deposits. }}Foreign banks are active in Bangladesh. The nine foreign commercial banks control approximately 6.3% of the banking sector’s total assets.
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PAYMENT INSTRUMENTS }} Payment statistics
Thousands of transactions
% change 2013/2012
Traffic (BDT billions)
2012
2013
20,087
22,060
9.8
10,804.86
12,043.40
11.5
Debit card payments
–
–
NA
585.0
775.7
32.6
Credit card payments
–
–
NA
57.0
62.7
10.0
Internet banking
–
–
NA
48.7
90.5
85.8
20,087
22,060
9.8
11,495.56
12,972.30
12.8
Cheques
Total
2012
2013
% change 2013/2012
Source: Bangladesh Bank, Financial Stability Report, 2013.
Cash }}Cash is the primary payment method in Bangladesh for low-value retail and commercial transactions.
Credit transfers }}Credit transfers can be paper based or automated. }}Electronic credit transfers are used by companies for salary and supplier payments. }}Electronic credit transfers are cleared and settled via BEFTN on a next-day basis. }}MICR-encoded paper-based transfers are cleared and settled on a same-day or next-day basis, depending on high-value or regular-value clearing rules.
Direct debits }}Direct debits are available in Bangladesh, but not widely used. }}Direct debits can be used for low-value recurring payments such as utility bills, provided there is a signed authorisation in place. There is no value threshold for direct debits. }}Direct debits are cleared and settled via BEFTN on a next-day basis.
Cheques }}The cheque is the dominant cashless payment instrument in Bangladesh in terms of both volume and value, and is used for retail and commercial payments. }}Cheques are truncated into electronic items before being cleared via BACPS. }}High-value cheques (above BDT 500,000) are cleared on a same-day basis. Cheques with a value of BDT 500,000 or below are cleared on a next-day basis. Final settlement takes place across participants’ accounts held at Bangladesh Bank. }}In 2013, the total value of high-value cheque payments processed via BACPS increased by 15.1%, to BDT 6,977.9 billion. The total value of regular-value cheque payments increased by 7.0%, to BDT 5,165.5.4 billion.
Card payments }}The use of payment cards, particularly debit cards, in Bangladesh has increased rapidly in recent years. }}Debit cards are issued by 40 banks in Bangladesh and credit cards by 28 banks. }}Visa and MasterCard are the principal credit card brands issued in Bangladesh.
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}}Each bank in Bangladesh establishes its own individual clearing and settlement arrangement with the card associations. }}There were approximately 4500 ATMs and 700,000 POS terminals in Bangladesh at the end of 2013. }}The National Payment Switch Bangladesh (NPSB) facilitates interbank payments from ATMs and POS terminals, as well as internet and mobile applications. }}Electronic money schemes are available in Bangladesh in the form of reloadable pre-paid cards.
Other payments }}Bangladesh Post Office enables paper-based money orders up to BDT 5000 and electronic money transfers.
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PAYMENT SYSTEMS }} Type }}BACH (Bangladesh Automated Clearing House), operated by Bangladesh Bank, is located in Dhaka and seven other clearing regions. BACH also covers all 71 towns where Sonali Bank previously carried out cheque clearing on Bangladesh Bank’s behalf. BACH is comprised of: }}BEFTN (Bangladesh Electronic Funds Transfer Network), a deferred net settlement system for processing electronic credit and debits; and }}BACPS (Bangladesh Automated Cheque Processing System), a deferred net settlement system. }}Bangladesh Bank will launch a real-time gross settlement system on 8 October 2015.
Participants }}All scheduled banks can participate in BACH.
Transaction types processed }}BEFTN processes electronic credit and debit transfers. There is no value threshold. }}BACPS processes cheques and all other MICR-encoded paper-based payments.
Operating hours }}See Clearing cycle details for information on the BEFTN and BACPS systems.
Clearing cycle details BEFTN }}BEFTN clears all payment instruments electronically. }}Settlement takes place on a next-day basis. }}Final net settlement takes place across participants’ accounts held at Bangladesh Bank. BACPS }}Cheque payments are processed via image technology and truncated into electronic items before being processed. }}High-value cheques (above BDT 500,000) are settled on a same-day basis. }}Cheques with a value of BDT 500,000 or below are settled on the same day, with funds available to beneficiaries on a next-day basis. }}Final net settlement takes place across participants’ accounts held at Bangladesh Bank.
Currency centre holidays* 2nd half 2015 2016
5, 24–26 Sep**, 23, 24 Oct**, 16, 24**, 25, 31 Dec 21 Feb, 17, 26 Mar, 14 Apr, 1, 21** May, 1, 3, 6, 7 Jul**, 15 Aug, 12–14 Sep**, 11 Oct**, 12**, 16, 25, 31 Dec ** The date shown may vary by plus or minus one day. These dates are derived by converting from a nonGregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon. * Source: www.goodbusinessday.com.
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CASH MANAGEMENT }} Domestic Notional pooling }}Notional pooling is not permitted. Cash concentration }}Cash concentration is only permitted between accounts belonging to the same parent company. }}Cash concentration is restricted to BDT-denominated accounts. }}Cross-border cash concentration is not practised in Bangladesh.
Cross-border }}Cross-border payments are routed via SWIFT and settled through accounts held with correspondent banks abroad.
Lifting fees }}Percentage-based fees are applied on funds transfers between resident and non-resident accounts.
Short-term investments }}Interest can be earned on resident and non-resident savings accounts and time deposits. }}Demand and time deposits are available in BDT or major foreign currencies. Maturities range from one month to over one year. }}Sharia-compliant Mudaraba term deposits are available, with maturities ranging from six months to eight years. The minimum investment amount is BDT 1000. }}Commercial paper is issued in Bangladesh, with maturities ranging from three months to one year. }}Treasury bills are issued via weekly auction by Bangladesh Bank, with maturities of one, three, six or 12 months. Foreign investors can invest in government Treasury bonds. The foreign investor must hold a non-resident foreign currency account for purchasing Government Treasury Bonds, and is only permitted to sell the bonds to another foreign investor within one year. After the expiry of a year, the bond can be sold to both foreign and/or local investors. }}Bangladesh Bank issues sharia-compliant Government Islamic Investment Bonds (GIIBs), with maturities of six, 12 and 24 months on the government’s behalf. }}Bangladesh Bank bills (BB-bills) with maturities of one or three months are also issued. }}Certificates of deposit are offered with maturities of three months to one year. }}Repurchase agreements (repos) and reverse repos are available as a method of short-term investment for banks. }}Banker’s acceptances are available. }}Money market funds are available.
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Custody and securities settlement Information provided by www.globalcustody.net, 2015.
Depository }}Central Depository of Bangladesh Limited (CDBL). }}Current clearing, settlement and custody processes in Bangladesh’s capital markets do not provide for the efficient infrastructure necessary for future market development. }}The Bangladesh Securities and Exchange Commission has set out a master plan to address five areas of weakness: }}Duplication of clearing and settlement infrastructure at the Dhaka and Chittagong stock exchanges; }}Lack of delivery versus payment for indirect market participants; }}The need for participants to provide cash and securities two days ahead of settlement date; }}The payment of cash dividends direct from issuers to end investors, rather than flowing through the depository, causing delay, uncertainty and inefficiency; and }}Lack of straight through processing, leading to manual rekeying of orders and file transmission and increasing operational risk. Settlement cycle }}Generally T+3.
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ELECTRONIC BANKING }} }}Electronic banking is available in Bangladesh and offered by many of the country’s leading commercial banks. }}There is no bank-independent electronic banking standard in Bangladesh; each bank offers its own proprietary system for corporate banking purposes. }}Services available include balance and transaction reporting and payment initiation. }}Internet banking is offered by 41 banks in Bangladesh, but usage is limited due to the country’s low internet penetration, approximately 6.5% of the population. Several leading commercial banks provide e-commerce services. }}Internet or online-initiated transfers between accounts held at the same bank are subject to a limit of BDT 500,000 for each transaction. }}Internet banking payments increased in value by 85.8% in 2013, to BDT 90.5 billion. }}Electronic bill presentment and payment (EBPP) services are available for utility bills. }}Mobile banking is offered by Bangladesh’s leading commercial banks; there are 28 banks licensed to provide mobile banking services with 19 schemes currently in operation offering services such as utility and transport payments, disbursement of inward foreign remittances, fund transfers, business to customer payments such as salary payments, payments between the government and individuals and micro finance payments. }}bKash and Dutch-Bangla Mobile Banking are the most commonly used mobile banking platforms in Bangladesh. }}To facilitate the use of mobile banking, Bank Bangladesh has introduced the Mobile Financial Services (MFS) to centrally process and oversee mobile banking transactions. Under the MFS, mobile banking customers’ transactions are limited to BDT 10,000 a day and BDT 25,000 a month. }}There are over 20 million mobile banking customers in Bangladesh. In March 2014, the value of mobile banking transactions totalled BDT 8206 crore, up from BDT 6642.61 crore in December 2013. }}The Post e-Pay mobile banking service is offered by the Bangladesh Post Office.
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TRADE FINANCE }} Trading partners* Import Export
China 21.7%, India 16.3%, Malaysia 5.2%, South Korea 4.5%, Japan 4.1%. USA 18.7%, Germany 15.8%, UK 10.2%, France 6.2%, Spain 4.6%, Canada 4.3%, Italy 4%. * The World Factbook 2013-14. Washington, DC: Central Intelligence Agency, 2013 (www.cia.gov/library/publications/the-world-factbook/index.html).
Imports Documents }}In order to import goods into Bangladesh, a customs declaration, packing list, cargo release order, certificate of origin, bill of lading, commercial invoice, terminal handling receipt and technical standard/health certificate are required. }}Letter of Credit Authorisation Forms (LCAFs) are usually required for imports into Bangladesh and payments made against imports are usually only possible with accompanying Letters of Credits. Capital machinery, industrial raw materials and consignments of perishable food items worth over USD 7500 do not require a LCAF. Licences }}Industries located within the export processing zones (EPZs), require permission from the Bangladesh Export Processing Zone Authority (BEPZA). }}Licences are not required for the majority of imports. Approximately 25 items are subject to import restrictions. Taxes/tariffs and other fees }}Bangladesh is a member of the South Asian Association for Regional Cooperation (SAARC), which aims to abolish most trade tariffs among member states by 2016. }}Bangladesh is a signatory of the South Asia Free Trade Agreement (SAFTA), alongside Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. }}Imports are generally subject to five different tariff rates: 0%, 3%, 5%, 12% and 25%. }}Luxury goods and cigarettes are subject to supplementary duties. }}Bangladesh currently has eight EPZs in operation. Within EPZs, reduced duties apply to imports to be used in the manufacture of exports. Prohibited imports }}A negative list (of products that may not be imported) is in operation. }}It is prohibited to import certain commodities into Bangladesh, in order to protect fauna and flora, and for national security and moral reasons. }}Imports from Israel and or goods transported on Israeli flag vessels are prohibited.
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Country Profile
BANGLADESH
Exports Documents }}In order to export goods from Bangladesh, a customs export declaration, commercial invoice, pre-shipment inspection clean report of findings and packing list are required. }}A clean pre-shipment inspection report is also required for items to be exported. Licences }}Industries located within the EPZs require permission from BEPZA. }}Licenses are required for the export of items subject to international export control regimes. Taxes/tariffs and other fees }}Export taxes are levied on ready-made garments and jute. Prohibited exports }}A negative list (of products that may not be exported) is in operation. }}It is prohibited to export 17 items under Bangladesh’s current export policy.
Financing imports and exports Imports }}Importers are permitted to obtain buyer credit for import payments from abroad for a period of up to one year. This must be done through authorised dealers and interest rates are not permitted to exceed 6% a year. }}Advance import payments may be effected by authorised dealers (without prior authorisation from the Bangladesh Bank) if there is a repayment guarantee from a bank based abroad. }}A repayment guarantee is not needed for advance import payments up to USD 5000 or the equivalent in foreign currency for imports of permissible items. This limit is USD10,000 or its equivalent if import advance payment funds come from exporters’ rentention quota accounts. }}Banks are permitted to make certain pre- and post-shipment financing. Exports }}There are no financing requirements for exports. }}Exporters are permitted to receive advance payment up to any amount against exports.
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Country Profile
BANGLADESH
USEFUL CONTACTS }} Bangladesh Bank
www.bangladesh-bank.org
Leading banks:
Agrani Bank
www.agranibank.org
Islami Bank Bangladesh
Janata Bank
www.janatabank-bd.com
Prime Bank
www.primebank.com.bd
Sonali Bank
www.sonalibank.com.bd
www.islamibankbd.com
Bangladesh Association of Banks
www.abbd.org
Ministry of Finance
www.mof.gov.bd
Ministry of Commerce
www.mincom.gov.bd
Federation of Bangladesh Chambers of Commerce and Industry
www.fbcci-bd.org
Export Promotion Bureau
www.epb.gov.bd
Board of Investment
www.boi.gov.bd
Investment Corporation of Bangladesh
www.icb.gov.bd
Securities and Exchange Commission
www.secbd.org
Dhaka Stock Exchange
www.dsebd.org
Chittagong Stock Exchange
www.csebd.com
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