Bangladesh Bank (BB) has curtailed the powers of the banks’ board of directors to waive interest on loans without consultations with the relevant departments, while allowing mobile financial service (MFS) providers to repatriate export income and inward remittances. The central bank’s directive came through two circulars issued separately by the Banking Regulations and Policy Department (BRPD) and the Foreign Exchange Policy Department (FEPD) on Wednesday.
The BRPD circular said the banks in case of interest waiver have to take the opinion of the head of internal control and compliance (HICC) through internal audit department. The circular stated that in essential cases, the opinion of the HICC should be taken through the internal audit department of the bank to confirm the rationale of relaxation of the conditions for collection of funds.
It said that banks can waive interest on loans due to various uncontrollable reasons such as death of the borrower, natural calamities, epidemics, flood, due to distress, or closed project bank loan interest may be waived in whole or in part. But recently, it has been seen that the banks often waive the interest of various customers without considering these special circumstances.
“This may create disinclination among the customers to pay the bank dues within the stipulated time to get the interest waiver facility, which is against the overall credit discipline in the banking sector,” the circular said. For this purpose, to create awareness among the customers to pay the bank’s dues within the prescribed period, maintain overall credit discipline and protect the customers’ interests, the new guidelines should be followed in the waiver of all types of interest, the BRPD said.
The FEPD circular said all authorised dealers in foreign exchange and all licensed MFS providers are allowed to receive export income on account of information technology enabled services (ITES) exports in association with internationally recognised OPGSPs/digital wallets and/or aggregators having operation in multiple countries.
The circular was sent all the authorised dealers and MFS providers for immediate implementation. The notification said that authorised dealers maintaining settlement accounts will issue encashment certificates in support of inward remittances on request from MFS providers electronically. In this case, the request needs to be supported by auto-generated information – beneficiary’s name, wallet account number, the amount in taka, date of credit – from a remittance service provider abroad.
Based on their own screening parameters regarding the information, designated authorised dealers shall generate an electronic encashment certificate (as per enclosure A) with QR code accessible to beneficiaries through MFS providers. The certificate is intended to be used for income tax purpose only.
