Bangladesh Bank Issues New Guidelines to Regulate Limited Money Changer Services

Aiming to standardize and streamline the licensing procedures, enhance compliance, and promote greater transparency in foreign exchange operations, this circular sets out new guidelines for scheduled bank branches, booths, hotels, gift shops, and other entities providing limited money changer services. They set out clear provisions for license issuance, renewal, permissible activities, and operational restrictions.

Under the new framework, authorized dealer (“AD”) banks are required to ensure compliance with specific eligibility criteria, operational boundaries, renewal procedures, and accountability standards when facilitating the issuance of limited money changer licenses. Applications with all required documentation must be routed through an AD bank to the Foreign Exchange Policy Department of the Bangladesh Bank (“BB”).

Licensed bank branches or booths must show that they have trained personnel for handling foreign exchange transactions, robust security measures, and adequate IT infrastructure. Non-bank entities such as hotels or gift shops must provide updated trade licenses, tax identification numbers, business registration certificates, and other relevant records.

For license renewal, companies must submit their registration certificate, memorandum and articles of association, audited financial statements, and proof of ownership or lease of the business premises. Once preliminary approval is granted, applicants are required to deposit a non-refundable fee of BDT50,000 via a pay order to the designated department of the BB.

The circular clarifies that licenses issued to bank branches or booths are not transferable. Permitted activities include the exchange of foreign currency, endorsement of dollars on passports for outbound travelers, and encashment of foreign currency. License holders must obtain prior approval from the BB before changing their business address. All foreign currency collected must be converted into local currency by the next working day, although licensees may retain up to US$1,000 or its equivalent to facilitate transactions.

The BB reserves full authority to approve or revoke limited money changer licenses at its discretion.