Foreign Remittance-Regulatory issue, Products and payment method,

Prevention of fraudulent payment, expatriate customer services and concept

of NRD-NRT, Convertible-Non-convertible, Nostro-Vostro-Loro A/Cs.

Foreign Remittance
Foreign remittance means remittance of foreign currencies from one place/person to
another place/person.

In broad sense, foreign remittances include all sale and purchase of foreign currencies on
account of Import, Export, Travel and other purposes.

However, specifically Foreign Remittance means sale and purchase of foreign currencies for
the purposes other than export and import.

Importance of Remittance:

Impact on the GNP:

Increase in foreign remittance also increase the national income. As the national income
increase the consumption of goods by the country people also increase. So, production of
goods by the different organizations increases as well. It increases our countrys GNP.

Impact of remittance on consumption:

As the remittance increase the consumption of goods by the country people also increase.

Increase savings:

Foreign remittance that comes from different developed countries is increasing the level of
our savings. The remittance received by our country people is saving in different banks by
makinglong term or short term deposit.

Increase capital:

Remittance received from different developed countries which is saving in different banks a
bigsource of capital. This huge amount of money is investing is different project by the bank.

Impact of remittance on investment:

Foreign remittance is increasing the investment of our country. The remittance is using for
smalland big investment in different project, establishing firm or industry, small or big shop
whichincreases the proper utilization of money.

Increase employment:

As the investment increase, the employments of our country also increase. The people of
our country are getting jobs in different project, firm or industries.

Impact of remittance on import:

It has a negative impact on our economy too. By increasing remittance, it also increases
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consumption of foreign product. It increases import of foreign products. People have

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enough money to buy foreign product, although government is trying to save our domestic
companies by implementing necessary rules and regulation.

All foreign remittances are grouped into two broad categories and guided by the Foreign
Exchange Regulation Act, 1947 and guidelines for Foreign Exchange Transactions of
Bangladesh Bank:

a) Foreign Inward Remittance

b) Foreign Outward Remittance

As per Guidelines for Foreign Exchange Transactions of Bangladesh Bank, the term
Inward Remittances includes not only remittance by T.T., M.T., Drafts etc., but also
purchase of bills, drafts, Traveler's cheques and foreign currency notes and coins,
Cheques issued on foreign banks in favour of beneficiaries in Bangladesh etc.

Purposes of Inward Remittances:

-Family maintenance
-Indenting commission
-Recruiting Agents commission
-Realization of export proceeds
-Donation
-Foreign Investment
-Gift etc.

Some important rules

a) Any amount can be brought in.

b) Form C (Appendix 5/6) to be filled in signed by

the beneficiary for above US$5000/-- mentioning
the purpose of remittance.

c) Form FMJ (Appendix 5/7to be declared to the

custom for above US$5000/- on arrival of
incoming passenger.

d) the remittance is for gift, donation, permission to

be obtained from respective ministry/authority.

The mode of Inward remittances are:

i) (TT) Telegraphic Transfer
ii) (MT) Mail Transfer
iii) (FDD) Foreign Demand Draft
iv) (PO) Payment Order
v) (TC) Travelers Cheque
vi) Foreign currency notes.

Procedure of payment of inward remittance

The message must be in original.

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It must be authenticated
 T. T. must contain the name of bank, name of branch, name and a/c number of the
beneficiary. If the above point are okay, payment may be m ade to the beneficiary as soon
as possible.

Payment of T.C

Travelers cheques may be paid at the counter of the bank on presentation, obtaining
signature of the purchaser on the T.C.
After verifying the signature of the holder with the signature already on the T.C., the
payment will be effected in local currency at the prevailing conversion rate.
The T.C may also be deposited in foreign currency account. T.C is bought & sold by the
banks with which arrangements have been made by the issuing banks.

T.Cs are being paid at the T.T clean buying rate. The Travelers Cheques bought by the
bank have to be sent to their foreign correspondents with the instruction to credit the
proceeds on collection to their NOSTRO account with them.

Demand Draft :
o D.D. must be original

o Name of bank, name of branch, date, name and a/c number of the payee
/beneficiary, amount in word and figure must be mentioned.

o The D.D. must be as per prescribed format or specimen copy supplied earlier (if any)

o The amount is protecttographed .

o Payment is not stopped.

o Draft is not reported lost.

o Verification of drawers signature.

o Confirmation (Telex/Swift) from issuing bank, if the amount exceeds the limit as per
agreement made earlier.

Spot Cash
Reporting to Bangladesh Bank:

All the foreign exchange transactions of each month on inward remittances have to be
reported to Bangladesh Bank through statements along with schedules before a stipulated
date.

Foreign Outward Remittance:

Foreign currency being made out abroad may be termed as foreign outward
remittance.

Common Modes of Foreign Outward Remittance:

T.T, D.D, M.T and TC are the common modes of foreign outward remittance.
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TT, DD, MT, and TC may be issued by authorized dealers in Bangladesh drawn on their
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 foreign correspondents. Selling foreign currency notes may also effect outward
remittances by AD to Travelers.

Application for Outward Remittance:

(a) In all cases of purchases of foreign currency an application on prescribed form

must be made to an AD and, wherever necessary to Bangladesh Bank.
For payments against imports in to Bangladesh, the prescribed application form is
Form IMP (Appendix 5/11) and for other types of remittances Form TM
(Appendix 5/5, Chap.5, Sec.1, Para-2).

(b)TM form must be used for reporting by the ADs even when remittance is approved
by Bangladesh Bank in any other manner, for instance by issuing a special permit.
On receipt of the application in the prescribed form, the ADs may effect the sale of
foreign exchange if they are empowered to approve the application.

If the transaction requires prior approval of the Bangladesh Bank, the form should be
forwarded by the AD to the Bangladesh Bank for consideration.

Period of Validity of Approval of Bangladesh Bank:

All authorizations (excepting TM forms approved by the Bangladesh Bank) by the ADs on
behalf of the Bangladesh Bank remain valid for a period of not exceeding 30 days from the
date of approval unless they are expressly stated as valid for a specified longer period or
unless they have been revalidated for a further period.

TM Form approved by the Bangladesh Bank will, however, remain valid for a period of three
calendar months from the date of approval by the Bangladesh Bank.

Out ward remittances are of different types:

(a) Private Remittance
(b) Official & Business Travel-related Remittance
(c) Commercial Remittance

Private Remittance:
(a) Family remittance facility:

Expatriates working in Bangladesh with the approval of the Govt. may remit through an AD(
to the country of their domicile) 75% of their net income and 100% of their leave salary, as
also actual savings and admissible pension benefits, without prior approval of BB. Here net
income signifies gross income of the applicant less all compulsory deductions such as,
income tax, provident fund and pension fund, house rent and other deductions which are of
a fixed nature.

(FE Circular No.06,dated April15, 2013)

Remittance of moderate amounts for maintenance abroad of family members (spouse,

children, parents) are allowed by BB on written request supported by certificates from the
Bangladesh mission in the concerned country.
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(b) Membership fee and registration fee:

- AD may remit without prior approval of Bangladesh Bank, the membership fees of foreign
professional/scientific Institutions.
- They are also allowed to remit fees for application, registration, admission, examination
(TOEFL, SAT etc.) in connection with admission into foreign educational institutions on the
basis of written application or demand notice/letter from the concerned foreign institution
showing the amount to be remitted.
- The draft/TT etc. to be issued for such remittances should be payable direct to the
institution concerned and the transaction should be reported to the BB supported by Form
TM in the usual monthly return. Chap.11, Para-9

(c) Education:

Prior approval of BB is required to release foreign exchange for study of Bangladeshi

students abroad at school level. However, Ads are allowed to release the foreign exchange
for admission and study by Bangladesh nationals in regular courses such as undergraduate,
post graduate, language course pre-requisite to bachelor degree & professional
diploma/certificate courses in recognized institutions abroad subject to verification of
bonafides according to the following drill: ( Chap.11, Para- 10)

Application duly filled in;

Original and photocopy of admission letter issued by the educational institution in

favour of the student (such as the I-20 in the case of US institutions);

Original and photocopy of estimate relating to annual tuition fee, board and lodging,
incidental expenses etc. issued by the concerned educational institution ( I-20 in case
of US institutions);

Attested copies of educational certificates of the applicant; and

Valid passport.

The facility of purchase of foreign exchange/remittance will not be admissible for

more than one academic year at a time;

For each release of foreign exchange subsequent to the first release, the current
progress report and current estimate of the educational institution should be taken
into consideration;

The Ads shall maintain separate file for each student with all relevant papers in
readiness for perusal by inspecting officials of BB.

(d) Remittance of consular fees:

Consular fees collected by foreign embassies in Bangladesh Taka and deposited in a Taka
Account maintained with an AD solely for depositing the consular fee collections may be
remitted abroad without prior Bangladesh Bank approval; the AD shall report such
remittance in the usual monthly returns along with the relevant TM Form to the concerned
area office of the Bangladesh Bank. Chap.11, Para-11
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(e) Travel:
With effect from April 06, 2014 annual travel quota entitlements for a Bangladeshi adult
national to visit (a) SAARC member countries and Myanmar and (b) to other countries were
re-fixed at maximum 5,000 USD or equivalent and 7,000 USD or equivalent respectively
during a calendar year. For minors (below 12 years in age) the applicable quota will be half
the amount admissible for adults. However, foreign exchange in the form of cash must not
exceed US $3000 per person per trip.(FE Circular No. 17, dated April 06, 2014).

While releasing foreign exchange for travel purposes the ADs should ensure that:

The intending traveler is a client of the AD bank or is sufficiently well known the the
AD bank for it to be satisfied about the bonafide of the application;

The intending traveler is in possession of a confirmed air ticket (where applicable) for
journey to be undertaken;

The amount released is endorsed on the passport and air ticket of the traveller with
indelible ink, with the signature and name of the AD branch embossed in the
passport and ticket. (Passport Endorsement)

(f) Health/Medical:
ADs without prior approval of Bangladesh Bank may release foreign exchange up to $ 10,000
for medical treatment abroad on the basis of the recommendation of the medical
board/specialist set up by he Health Directorate and the cost estimate of the foreign
medical institution. Request for release of foreign exchange exceeding US$10000 for
treatment abroad should be forwarded by the AD with supporting documents to BB (foreign
exchange operation deptt.) which will authorize release upon verification of the bon afides
of the expenses. Chap.12, Para-2

g) Seminars and workshops:

Without prior approval of Bangladesh Bank, ADs may release foreign exchange to private
sector participants up to US$200 per diem for SAARC member countries or Mayanmar and
US$250 per diem for other countries. for attending in the conferences, seminars and
workshops. Chap.12, Para-4

(h) Foreign nationals:

The ADs may issue foreign currency TCs to foreign nationals without any limit and foreign
currency notes up to USD 2000 per person against surrender of equivalent amounts in
foreign currencies. The TCs and foreign currency notes should, however, be delivered only
on production of a ticket for a destination outside Bangladesh and the amount issued should
be endorsed on the relative passports. In case of travel by car, the ADs may accept export-
cum-import permits in lieu of tickets. Chap.12, Para-6

(i)Remittance for Hajj:

The GoB announces each year the scale at which foreign exchange may be issued to
intending pilgrims for performing Hajj. Release of foreign exchange should be made as per
instructions to be issued for this purpose by BB each year. Chap.12, Para -10

Official and Business Travel:

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i) Official visit:

For official or semi-official visits abroad by the officials of

Government/Autonomous/Semi-autonomous institutions etc., Ads may release foreign
exchange as per entitlements fixed by the Ministry of Finance/respective competent
authority from time to time. In such cases, the applicant for foreign exchange shall be
required to submit the Competent Authority's Order/Notification /Circular authorising the
travel abroad. Chap.12, Para-3

ii) Business travel for new exporters:

Up to US$6,000 are allowed to carry by new exporters, which may be issued by ADs without
prior approval of Bangladesh Bank against recommendation letter from Export Promotion
Bureau. Genuine requirements for higher amounts will be considered by Bangladesh Bank
on applications submitted through ADs with supporting documents. Chap.12,
Para-7

iii) Business travel quota for importers and non-exporters:

Subject to annual upper limit of US$5,000 importers are entitled to carry business travel
quota and non-exporting producers quota @ 1% of their imports/turnover settled during
the previous year/declared in their tax returns. ( Chap.12, Para-7(ii)

iv)Exporters retention quota:

Merchandise exporters may retain up to 50% of repatriated FOB value of their exports in
foreign currency accounts (for garments exporters, the quota is 10%) may use for business
visit abroad, participation in export fairs, seminars, office maintenance abroad, import of
raw materials. (Chap.13, Section-(iv)

Expatriate Customer Service

The service provided by a bank to the non - resident Bangladeshis is known as expatriate
customer service.

What Services Does IBBL Provide to the Expatriate Customers?

At present, FRSD, IBW, HO has been rendering the above services as Central Foreign
Remittance Delivery Hub (CFRDH) using the following methods:
Credit to Beneficiarys Accounts maintained with our Branches
Payment of Instant Cash through IBBL Online Money Transfer System
Maintaining & Payment of Remittance Card
Payment through 3 rd Banks by BEFTN
Payment through 3 rd Banks by TTPO and Bank to Bank TT
Expatriate Bank Account Opening
Issuing Cheque Book against NRB Accounts
SMS Notification
i-Banking Services
Day Long Call Center
Customer Service
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Maintaining VOSTRO Accounts with IBBL

 mCash

How to deal with customers?

Accept the customers with greetings

Should be smiling face

Give attention to the customer cordially

Listen to the requirements of the customer attentively

Speak with Manner & Etiquette

Try to Solve the Problem Efficiently

Evaluate the Customers as per Status

Customers are the Life Blood of the Bank. So, all Kinds of Customer Service Have to
be Provided

Dealings with expatriate clients

Answer immediately to phones and emails from foreign remittance clients.

Maintain the privacy of NRB clients.

Execute payment, amendment & cancellation of FTT with no delay.

Expatriate clients reside in a community. A single expatriate client will influence his
full community. So, take care of them.

Answer immediately to phones and emails from foreign remittance clients.

Maintain the privacy of NRB clients.

Execute payment, amendment & cancellation of FTT with no delay.

Expatriate clients reside in a community. A single expatriate client will influence his
full community. So, take care of them.

Common Errors while pulling out from web system(Spot Cash)

01. Payment without pulling out

02. Non payment after pulling out.

03. Duplicate payment.

04. Not inputting valid data (ID No, Address etc) while pulling out.

05. Posting in wrong NRT account Posting with wrong ref no.

06. Posting with wrong amount.

07. Non posting in eIBS

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Convertible Taka Account
ADs may open convertible Taka accounts in the names of foreign organizations/ nationals viz.,
diplomatic missions, UN organizations, non-profit international bodies, foreign contractors and
consultants engaged for specific projects under the Govt. semi Govt. agencies and the expatriate
employees of such missions/organizations who are resident in Bangladesh. These accounts may be
credited with foreign currency brought in or remitted from abroad or transferred from a foreign
currency account or another convertible Taka account. For transfer from another convertible Taka
account, the taka amount from the transfer or's account would be converted into foreign currency for
transfer and credit to the recipient account by reconversion into Taka. No money emanating from a
business originating in Bangladesh and otherwise repatriable to Bangladesh can be credited to these
accounts. A convertible Taka account may be debited for payments in foreign currency abroad, for
local expenses, for transfers to foreign currency accounts or other convertible Taka accounts or for
credits to a non-convertible Taka account.

Non-convertible Taka Account

Foreign organizations/their expatriate personnel mentioned at para I above may maintain non - convertible
Taka accounts with ADs without prior BB approval. These accounts may be credited with funds from con
vertible Taka accounts, with remittances from abroad, and with Taka received from authorised sources
including interests from STD accounts. These accounts may freely be debited for local expenses. No
remittance abroad or transfer to an fc account/convertible Taka account may be made by debit to a non -
convertible Taka account.

Nostro Account:
(Italian, from Latin, Noster ; English, 'ours'). Account held by a particular domestic bank in a foreign
bank is called Nostro account. A Nostro is our account of our money, held by you.

Vostro Account:
(Italian, from Latin, Voster; English, 'yours') . Account held by a foreign bank in a domestic bank is
called Vostro account. A Vostro is our account of your money, held by us.

A nostro is our account of our money, held by you

A vostro is your account of your money, held by us

Loro account
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There is also the notion of a loro account ("theirs"), which is a record of an account held by a second bank on
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behalf of a third party; that is, my record of their account with you.
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