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Bangladesh Offshore Banking Units / https://www.citybankplc.com/obu
- Thread starter andorra
- Start date
This is all brand new in Bangladesh. They have passed law (Offshore Banking Act 2024) and regulations to attract foreign capital. On paper, it looks quite attractive but it remains to be seen whether it's actually any good. So far, it seems City Bank, Eastern Bank, Prime Bank, and several more have opened up OBUs.
Banking in Bangladesh has improved a lot of the last few years. This new law could be a great benefit to Bangladesh, but it's not without risks. These banks are quite inexperienced with international banking of this type. Hopefully they don't turn accidentally turn into money laundering nests. It would be very unfortunate to have a bunch of EUR or USD flowing through an account in Bangladesh only to one day see the bank being kicked out by its correspondent bank after a sanctioned person or illegal activities are spotted.
Be careful. Take it slow. Monitor the situation. But it could be an interesting new possibility for international banking.
Banking in Bangladesh has improved a lot of the last few years. This new law could be a great benefit to Bangladesh, but it's not without risks. These banks are quite inexperienced with international banking of this type. Hopefully they don't turn accidentally turn into money laundering nests. It would be very unfortunate to have a bunch of EUR or USD flowing through an account in Bangladesh only to one day see the bank being kicked out by its correspondent bank after a sanctioned person or illegal activities are spotted.
Be careful. Take it slow. Monitor the situation. But it could be an interesting new possibility for international banking.
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Really, quite interesting. BTW, Bangladesh is non-AEOI/CRS country (not even talking to OECD re:this).
@andorra, you are quite new at forum, so just a friendly notice: I've seen that you are repeatedly writing here using only lowercase letters. Although this is definitely more acceptable than using uppercase only, it is not welcome. Please note that the readability of such a text is remarkably lower.
If you look at their webpages, you'll see that the answer is yes
@andorra, you are quite new at forum, so just a friendly notice: I've seen that you are repeatedly writing here using only lowercase letters. Although this is definitely more acceptable than using uppercase only, it is not welcome. Please note that the readability of such a text is remarkably lower.
AFAIK, the central bank hasn't issued a list of OBUs yet. You just have to go through each bank individually and check. Not all banks have set up their OBUs the same way.
The focus is on term deposits as Bangladesh wants to use this as a way to attract foreign currency reserves. I'm not sure how comfortable I feel depositing foreign currency in Bangladesh so that the government and banks there share up their reserves. We'll see if transactional banking is an acceptable use. Some banks say that as long as you keep 5-10,000 EUR/USD in cash, you can use the excess transactionally.
Time will tell.
I applied yesterday to one of them, they claim no fees for SWIFT transfers. Only correspondent fees.
Looks like everyone can open it, and they don't require many documents.
TBH, it looks a little too good to be true, >7% on USD deposits for a year, no tax, (so far not much different than what I have), but NO FEES AT ALL? (even no fee for SWIFT transfer!?!)
Anyway, I think I'll do a stopover in Dhaka next time, and test it out.
I still have some 'Takas' from the last time, which I haven't managed to exchange anywhere outside of Bangladesh ;-)
City Bank Offshore Banking
Open a Deposit Account with City Bank Offshore Banking and avail the opportunity of enjoying attractive interest rate! Deposit accounts can be opened and maintained in USD or EURO.
www.citybankplc.com
You're only paying correspondent fees. As I mentioned, this is about driving up the amount of foreign currency in Bangladesh.
You can open the account remotely with most (if not all) OBUs.
I agree, this have to be the motivation.
Certainly. Nevertheless, for this case I'd also prefer to inspect the situation on site
(Seriously, I think that walking around and in and exploring the local environment a little, including some discussions with the business people can really say a lot, in such a case.)
They also open corporate accounts quite easily with minimum documentation required, maybe this is a good option for non-CRS banking that can be used in companies of jurisdictions with not very good reputation.
Bangladesh will sign up for CRS, especially if they're taking a steps to invite more international banking. The only reason they haven't yet is because it's been a low priority (due to very little international banking). If this works, pressure will increase on Bangladesh to become CRS compliant.
Don't expect Bangladesh to be some long-term secretive banking haven.
I agree fully, yet I guess that it will not happen very fast, to deploy CRS.
a) They are completely omitted by OECD/FATF until now – they are not even mentioned in the last group (DEVELOPING COUNTRIES NOT ASKED TO COMMIT AND THAT HAVE NOT YET SET A DATE FOR THE FIRST YEAR OF EXCHANGES) of the infamous
list AUTOMATIC EXCHANGE OF INFORMATION (AEOI): STATUS OF COMMITMENTS (I'm looking at its version from 23 Apr 2024, probably the last one). But this can change very quickly, for sure.b) (As you are definitely well aware) deploying CRS brings technical requirements to the banking system of the country which are not much simple. Taking into account the usual general rigidity of banking systems (I admit I have no clue how it looks in Bangladesh), my private estimation of (purely technical) possibility of the CRS launch is something like 3 years since the political decision...
Your opinion?
If Bangladesh is threatened with a FATF gray listing, you can be sure they will rush to comply. Bangladesh has a currency no one wants and an economy that's hugely reliant on export of physical goods in rather competitive sectors. Any threats to its access to USD, EUR, GBP, AUD, SGD, and other major international currencies is an existential threat.I agree fully, yet I guess that it will not happen very fast, to deploy CRS.
a) They are completely omitted by OECD/FATF until now – they are not even mentioned in the last group (DEVELOPING COUNTRIES NOT ASKED TO COMMIT AND THAT HAVE NOT YET SET A DATE FOR THE FIRST YEAR OF EXCHANGES) of the infamous
CRS is actually pretty easy to deploy. The government just builds or buys a platform that's hooked up the framework. To get a bare minimum CRS procedure deployed requires rather trivial technical changes by the banks: make sure you collect TIN (which it seems they already do), make sure you can get all the right data, and then submit it in the CRS portal. Once the basics are in place, you work on improving it.
My opinion is you're right. It will happen, but it will be probably be slow. How slow will to an extent depend on how well they manage any influx of international banking. The only way it happens within the next 1–2 years is if FATF or OECD apply pressure, or Bangladesh decides to preempt such pressure and just steamrolls ahead.
Agreeing at 100%.
Well, yes. I understand your perspective.
Honestly, I am probably remarkably influenced by some (shared) experience of people from major banks (or from companies that develop sw for them externally) how difficult and time consuming is to introduce even a minor change to the system and/or processes.
But possibly, banks in Bangladesh might not be so developed
Just generally – from my point of view, the crucial parameter for this case (“use or not-to-use”) is the reliability and quality of services provided by banks, which nobody can predict well at this moment, I am afraid. The political stability/instability in Bangladesh also counts a lot.
Definitely, anyone's future experience with OBUs will be more than appreciated
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