MFS operators allowed repatriation of export proceeds of IT sector

Bangladesh Bank on Wednesday allowed mobile financial service operators such as bKash, Nagad, Rocket and other MFS licence holders to repatriate export proceeds of small value IT-enabled services providers in digital wallets.

Usually, exporters of such IT related services repatriate export proceeds through the banking channel. 

“This is a commendable initiative as it would allow exporters of small-value IT-enabled services to receive their export earnings easily,” said Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS).

Digital transactions would increase further owing to the central bank's latest initiative, he said, adding that the service would open up a new avenue in building a cashless society. 

Besides, the government should offer a 5 per cent cash incentive for digital transactions, Kabir added. 

As per the BB instruction, MFS operators will have to make standing arrangements with internationally recognised foreign payment service providers like online payment gateway service providers, digital wallet providers or aggregators operating in multiple countries.

Besides, the MFS operators were asked to maintain settlement accounts in equivalent local currency with respective authorised dealer banks.

The notice also instructed AD banks to transfer funds received from foreign PSPs in their nostro accounts abroad to settlement accounts of MFS operators.

Based on this fund, the MFS operators will make funds available to digital wallets of exporters.

Foreign PSPs were allowed to maintain accounts in taka or foreign currency with AD banks for settlement of such payments.

AD banks can extend overdraft facilities over the accounts against payment guarantees based on the transaction flows, the notice said.

Exporters are entitled to retain foreign currency in retention quota accounts.

The notice allows such accounts to be maintained by AD banks. 

Retention quote accounts need to be credited with foreign currency before making credit of the funds to settlement accounts in taka with MFS operators.