Mobile financial service providers can bring remittance directly

Bangladesh Bank has allowed mobile financial service (MSF) providers to bring inward remittance, in order to increase remittance inflow.

The foreign exchange policy department of Bangladesh Bank issued a circular in this regard on Tuesday.

According to the circular, authorized dealers can make drawing arrangements directly with exchange houses abroad without prior permission from Bangladesh Bank.

Authorized dealers are also allowed to go for drawing arrangements without letters of reference or certificates from the Bangladesh embassy or high commission of the respective country.

In order to bring wider flexibility, MFS providers will be allowed to repatriate wage earners’ remittance in association with internationally recognized online payment gateway service providers, banks, digital wallets, card schemes, and aggregators abroad, said the Bangladesh Bank notification.

In this context, MFS providers must have standing arrangements with foreign PSPs to receive foreign currency in their account, and equivalent taka value will be credited to the wage earners’ MFS accounts.

Subsequently, foreign PSPs will provide credit to the designated dealer’s Nostro account (an account that a bank holds in a foreign currency in another bank). After receiving the amount in taka, wage earners’ can use the MFS account from abroad to do all transactions in Taka.

Mobile financial services who want to provide repatriation services have to apply to Foreign Exchange Policy Department by December 31, 2022, with details of proposed arrangements in accordance with the framework outlined above or similar conducive procedures.

Bangladesh Bank will primarily accord permissions, to review arrangements for piloting the initiative.

Bangladesh rolled out MFS in 2011. Since then, the service has seen a boom in the country. At present, 13 MFS operators are providing services to more than 18 crore account holders who are transferring nearly Tk 3,000 crore daily.