Instant Foreign Currency Settlement via RTGS from September 4

Commercial banks will conduct foreign currency transactions in the country through the central bank’s Real-Time Gross Settlement (RTGS) system from September 4 – a move that will ease the transaction process and minimize costs.

The Foreign Reserve and Cash Management Department of Bangladesh Bank issued a circular in this regard on Sunday.

The foreign exchange (FC) clearing and settlement process is manual and paper-based, which requires the physical movement of instruments and officials, leading to higher transaction costs and inconvenience, according to the bank. central.

Currently, banks must deposit foreign demand drafts (FDD) at the central bank through a clerk to conduct such transactions.

FDD is a channel used by banks to facilitate interbank funds transfers through the central bank channel, which requires one business day for settlement.

Currently, the RTGS method was used for local currency (taka) transactions within the country. But now any amount can be transacted in foreign currency via RTGS.

Banks can charge a maximum of Tk 100 including value added tax (VAT) or the equivalent in dollars and euros to customers for each transaction, the circular said.

The RTGS system is capable of operating in both local and foreign currencies. Bangladesh Bank now introduces clearing and settlement in five foreign currencies [US Dollar (USD), Great Britain Pound (GBP), Euro (EUR), Canadian Dollar (CAD), Japanese Yen (JPY)]. Chinese Yuan (CNY) clearing and settlement will soon be integrated into the RTGS system.

Seeking anonymity, a senior official from the relevant department said that with the service, banks will be able to quickly settle transactions in foreign currency as well as domestic currency.

“The process of settlement of import-export transactions of banks will be much easier. Trade, commerce and economic activities will be accelerated through faster settlement of transactions,” he said.

At present, more than 11,000 branches of the country’s banks currently carry out local currency transactions through the RTGS system.

Only the branch and head office of the authorized broker (AD) will be able to issue clearing units for foreign exchange transactions.

According to Bangladesh Bank data, in June this year, customers settled transactions of Tk 561,000,782 crore in national currency through the RTGS system, which is 29.15% more than the previous May. The total transaction in

May was 3 lakh 97 thousand 982 crores. Banks as well as financial institutions are connected to the RTGS. Currently, institutions transact in local currency.

About Ruben V. Albin

Check Also

Why Real Estate Investors Should Pay Attention to Currency Changes in Africa

The Zambian currency is currently listed as the best performing currency in the world and …