Dhaka: Bangladesh Bank (BB) has eased foreign payment regulations for small and medium enterprises (SMEs), enabling them to remit up to US$3,000 annually to cover bona fide current expenses abroad. This regulatory relaxation aims to facilitate the financial operations of SMEs on a global scale.
According to Bangladesh Sangbad Sangstha, the central bank issued a circular on Sunday, outlining that these remittances can be conducted through traditional banking channels or via international cards. To benefit from this facility, SMEs are required to be registered with the SME Foundation.
Banks have been granted permission to issue refillable international cards, known as "SME Cards," to a nominated official of each enterprise. These cards can initially be loaded with up to $600 to primarily cover online payments for bona fide expenses. However, the total annual ceiling for an SME, including both card transactions and direct remittances, is capped at $3,000.
The circular from Bangladesh Bank specifies that authorised dealers (ADs) must follow several guidelines: they must ensure that the SME is duly registered with the SME Foundation; for online bona fide current payments by SMEs, ADs may issue refillable international cards with $600 or equivalent to the nominated official of the enterprise within the set limit.
Additionally, the central bank clarified that outward remittances related to royalty, technical knowledge/know-how fees, technical assistance fees, and franchise fees will remain governed by the guidelines of the Bangladesh Investment Development Authority (BIDA). The authorisation under the new circular does not extend to these purposes.
The circular further stipulates that transactions under this authorisation must be executed by a single AD bank branch nominated by the remitter. Any request to change the AD branch must be submitted in writing by the respective enterprise, and relevant files should be transferred directly to the new branch.
Moreover, ADs are required to exercise due diligence on customers, including the deduction and payment of applicable taxes at source, VAT, and other levies, as well as adherence to Know Your Customer (KYC) norms.