THE FOREIGN EXCHANGE REGULATION ACT, 1947 (ACT NO.

VII OF 1947, 11th

March, 1947) (Amended upto September 09, 2015
Extent of the Foreign Exchange Regulation Act, 1947.
This Act may be called the Foreign Exchange Regulation Act, 1947.
It extends to the whole of Bangladesh, and applies to -
(a) all citizens of Bangladesh;
(b) all persons resident in Bangladesh; and
(c) all persons in the service of the People’s Republic of Bangladesh wherever they may be.
Authorised dealer” means a person for the time being authorised under section 3 to deal in
foreign exchange;
AD Branch (All Trsactions)
Money Changer (Cash FC Buy or Sell)
Limited Money Changer (Duty Free Shop, FC received for selling their goods)
Current account transaction:
It means receipts and payments which are not for the purpose of transferring capital, and also
includes
(i) receipts and payments due in connection with foreign trade, other current business
including services, and normal short-term banking and credit facilities in ordinary course of
business;
(ii) receipts and payments due as interest on loans and as net income from investments;
(iii) moderate amounts of amortization of loans or for depreciation of direct investments, in the
ordinary course of business;
(iv) expenses in connection with foreign travel, education and medical care of self, parents,
spouse and children; and moderate remittances for family living expenses of parents, spouse and
children resident abroad.
Capital account transaction:
It means a transaction for the creation, modification, transfer or liquidation of a capital asset,
including but not limited to, securities issued in capital and money markets, negotiable
instruments, non-securitized claims, units of mutual fund or collective investment securities,
commercial credits and loans financial credits, sureties, guarantees, deposit account operations,
life insurance, personal capital movements, real estate, foreign direct investment, portfolio and
institutional investment.
Restriction on settlement:
No person resident in Bangladesh shall, except with the general or special permission of the
Bangladesh Bank, settle any property, otherwise than by will, upon any trust under which a
person who at the time of the settlement is resident outside Bangladesh elsewhere than in territories
notified in this behalf, by the Bangladesh Bank, will have an interest in the property, or exercise,
other than by will, any power for payment in favour of a person who at the time of the exercise of
the power is resident outside Bangladesh elsewhere than in such notified territories (Section-17).
“Foreign currency” means any currency other than Bangladesh currency;
foreign exchange” means foreign currency and includes any instrument drawn, accepted, made or
issued under all deposits, credits and balances payable in any foreign currency, and any drafts,
traveller's cheques, letters of credit and bills of exchange, expressed or drawn in Bangladesh
currency but payable in any foreign currency;
Example:
LC in USD/FC: Foreign Exchange
RFCD: USD 2 million
BDT 5 crore: At the of encashment in USD
LC in BDT 5 crore: Paid in FC
The preconditions for person resident in Bangladesh:
Person resident in Bangladesh” means-

(i) an individual (Natural person) residing in Bangladesh for six months or more in the last
twelve months; like

Dual citizen:

(ii) an individual (Natural person) temporarily residing in Bangladesh holding a residential or

working visa valid for not less than six months;

FCBs: CEO from abroad with approval from BIDA usually 3 years

(iii) a person whose place of business is in Bangladesh; or

Example:
All exporters, importers, Type A/B/C
Renata Dhaka : Pharmaceutical Investment

(iv) a person whose principal place of business may be located outside Bangladesh but branch or
liaison office or representative office of such business is in Bangladesh;
Example:

HSBC, BD:
HSBC, SINGP

(v) diplomatic, consular and other representative offices of the Government of the People’s
Republic of Bangladesh abroad as well as Bangladeshi citizens employed at these offices;

Example:

BD Embassy in Japan and govt. appointed BD employees: Residents

(vi) persons holdings any office in service of the People’s Republic of Bangladesh wherver they
may be for the time being either on duty or on leave:

Example:

GoB assign any person for a particular: Resdient

provided that “person resident in Bangladesh” shall not include foreign diplomatic
representations or accredited officials of such representations located within Bangladesh and
offices of organizations established by international treaty located within Bangladesh;]
Example:
Japan Embassy in Bangladesh and govt. appointed JPN employees: Non-Residents

WB/IMF:

Japan Embassy in Bangladesh and BD employee: Resident (JPY/USD/EURO)

Japan Embassy in Bangladesh and Foreign employee: Resident (JPY/USD/EURO)

Export means:

(i) sending of goods, physical or non-physical or both, from Bangladesh to a place

outside Bangladesh;

Example:

BD/IND/CHINA/JAPAN

(ii) Providing services by persons resident in Bangladesh to any person outside Bangladesh; or

Consultancy in FC
(iii) selling Bangladeshi goods or raw materials or nonphysical contents to the enterprises in Export
Processing Zones, Special Economic Zones and Hightech parks of Bangladesh against payment in
foreign currency.]
Example:
AD Client and Non-EPZ Client:
AD Client and EPZ Client:
Non-EPZ Client to EPZ Client: Raw materials(Yarn/Fabrics/Accessories) in FC: Export
EPZ to Non-EPZ: USD 100000: Export
AD : USD 150000: Export USD150000
Total Export: USD2.5 lacs
How can a BD Marine Engineer & BD citizen employed in BD embassy open NFCD A/C?
In case of Non Epz to Epz export, is there EXP applicable?

Authorised dealers in foreign exchange

The Bangladesh Bank may, on application made to it in this behalf, authorise any person to deal
in foreign exchange. Authorised Dealers in foreign exchange (Section-3): Bangladesh Bank has
authority to authorise any person to deal in Foreign Currency. An authorised dealer shall in all his
dealings, in foreign exchange comply with such general or special directions or instructions of
Bangladesh Bank. An authorization under this section-
(i) may authorise dealings in all foreign currencies or may be restricted to authorizing dealings in
specified foreign currencies only;
(ii) may authorise transactions of all descriptions in foreign currencies or may be restricted to
authorising specified transactions only;
(iii) may be granted to be effective for a specified period, or within specified amounts, and may in
all cases be revoked for reasons appearing to it sufficient by the Bangladesh Bank after giving the
authorized dealer a reasonable opportunity of explaining its position.
Definition of Blocked Account:

(1) Where an exemption from the provisions of section 5 is granted by the Bangladesh Bank in
respect of payment of any sum to any person resident outside Bangladesh and the exemption is
made subject to the condition that the payment is made to a blocked account-
(a) the payment shall be made to a blocked account in the name of that person in such manner as
the Bangladesh Bank may by general or special order direct; and
(b) the crediting of that sum to that account shall, to the extent of the sum credited, be a good
discharge to the person making the payment.
(2) No sum standing at the credit of a blocked account shall be drawn on except in accordance
with any general or special permission which may be granted conditionally or otherwise by the
Bangladesh Bank.
(3) In this section “blocked account” means an account opened as a blocked account at any office
or branch in Bangladesh of a bank authorised in this behalf by the Bangladesh Bank, or an account
blocked, whether before or after the commencement of this Act, by order of the Bangladesh Bank.

Restriction on Foreign Companies

18B. 1[(1) Person resident outside Bangladesh (whether or not a citizen of Bangladesh) or a person
who is not a citizen of, but resident in, Bangladesh or a company (other than a banking company)
not incorporated under any law for the time being in force in Bangladesh shall report to Bangladesh
Bank within 30(thirty) days of obtaining permission from BIDA or similar competent authority
in Bangladesh to establish in Bangladesh a branch office or liaison office or representative office
or any other place of business for carrying on any activity of a trading commercial or industrial
nature.]

Example

Dubai Based Com> wish> Bank: BB Approval

Mashrque Bank outside EPZ: RO not as a bank branch:BIDA Approval

Mashrque Bank inside EPZ: RO not as a bank branch:BEPZA Approval

Mashrque Bank inside HTTP: HTPA

Mashrque Bank: as a bank branch:BB Approval

Penalty and Procedure

1[23. (1) Whoever contravenes, attempts to contravene or abets the contravention of any of the
provisions of this Act or of any rule, direction or order made thereunder, shall notwithstanding
anything contained in the Code of Criminal Procedure, 1898, be tried by a Tribunal constituted by
section 23A, and shall be punishable with imprisonment for a term which may extend to 2[Seven
years] or with fine or with both, and any such Tribunal trying any such contravention may, if it
thinks fit, and in addition to any sentence which it may impose for such contravention, direct that
any currency, security, gold or silver, or goods or other property in respect of which the
contravention has taken place shall be confiscated.

Example:

Being a resident: USD120000 for travel ( Jan to Dec)

Endorsement:
AD/MC/LM