Bangladesh Bank issues new policy for Offshore Banking

Bangladesh Bank, the central bank of Bangladesh, has issued new policy for Offshore banking operations. It has asked banks to maintain the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) for their offshore banking operations. 75% of the total outstanding offshore funds has to be invested in Bangladesh according to the new policy.

According to the new policy, banks have to:

  1. Maintain capital requirements under Basel-III framework.
  2. Implement ALM (Asset Liability Management) guidelines for their offshore banking operations.
  3. Renew the approvals of OBUs within 3 months of expiration by applying to BB.
  4. Launch offshore banking operations within 6 months of issuing date of approval.
  5. Report loans under offshore banking operations to the Credit Information Bureau.

According to the new policy, banks can not place funds with DBU in offshore banking operations. Currently, 35 commercial banks are operating their OBUs under the directive issued by Banking Control Department of Bangladesh Bank.

Elvis Gomes