Avenues to Receive Currency from a Foreign Jurisdiction in Bangladesh

By TRW Law Firm

Bangladesh has become a significant remittance-dependent economy, with over USD 20 billion received annually from millions of Bangladeshi nationals working abroad. Whether sent for family support, investments, education, or commercial transactions, foreign remittances are crucial for economic stability and personal sustenance. However, receiving foreign currency in Bangladesh must follow strict legal and regulatory protocols. These regulations are primarily governed by the Foreign Exchange Regulation Act, 1947, and administered by Bangladesh Bank, the nation’s central regulatory authority.

In this comprehensive TRW Law Firm guide, we explore the legal avenues to receive foreign currency in Bangladesh, the detailed procedures for each method, available incentives such as the 5% or 2.5% remittance cash incentive, and compliance obligations under Bangladeshi law.

⚖️ Regulatory Framework for Receiving Foreign Currency

Before delving into the different channels, it is essential to understand the regulatory ecosystem governing foreign currency inflows:

🔳 Foreign Exchange Regulation Act, 1947
This Act regulates payments, dealings in foreign exchange and securities, and the import/export of currency. It authorizes Bangladesh Bank to monitor and control all such transactions.

🔳 Bangladesh Bank’s Foreign Exchange Transaction Guidelines
These comprehensive guidelines cover every aspect of remittance transactions including approval processes, account opening, permissible limits, and compliance obligations.

🔳 Money Laundering Prevention Act, 2012
This Act obligates all financial institutions to conduct due diligence and monitor transactions to prevent illegal remittance or trade-based money laundering.

🏦 1. Direct Bank Transfers

Overview

The most conventional and secure method to receive foreign remittances in Bangladesh is via direct bank transfers. This applies to both individual and corporate beneficiaries. Authorized dealer banks (ADs) such as Dutch-Bangla Bank, Sonali Bank, Standard Chartered, and Social Islami Bank facilitate these transactions under the surveillance of Bangladesh Bank.

Types of Accounts for Receiving Money:

🔳 Individual Savings Account
🔳 Non-Resident Taka Account (NRTA)
🔳 Non-Resident Foreign Currency Deposit (NFCD) Account

Step-by-Step Process:

1. Sender collects recipient details:

• Full Name (as per National ID or Passport)
• Bank Account Number
• Bank Name and Branch
• District
• SWIFT Code of the recipient’s bank

1. Initiates the remittance via an overseas bank with SWIFT or through digital banking platforms.
2. Settlement Time: Generally within 2–3 business days.
3. Currency Conversion: Foreign currency is automatically converted to Bangladeshi Taka at official exchange rates unless sent to FC accounts.

Incentives & Conditions:

✅ 2.5% or 5% Government Incentive on remittances sent by Bangladeshi wage earners
✅ Applicable only if the sender is a Bangladeshi national working abroad legally
✅ Payment must be made into an individual savings account to qualify for the incentive

📱 2. Mobile Wallet Transfers (bKash, Rocket, iPay)

Overview

Mobile wallet services have democratized remittance access, especially for recipients in rural or underserved areas. Licensed by Bangladesh Bank, platforms such as bKash (backed by BRAC Bank) and Rocket (Dutch-Bangla Bank) allow instant remittance disbursals.

Process:

1. The sender uses an MTO (e.g., Western Union, MoneyGram, Xoom) or a digital remittance partner to initiate a transfer.
2. The sender provides:

• Recipient’s mobile number (linked to wallet)
• Valid identification
• MTCN (Money Transfer Control Number)

1. Recipient gets notified via SMS, and the balance appears instantly.
2. The recipient may cash out at any agent point or ATM.

Transfer Limits:

• Maximum: BDT 250,000 per transaction (bKash)
• No cap on frequency

Government Incentives:

✅ Eligible remittances receive a 5% incentive, credited directly to the wallet
✅ Must be sent through legally licensed remittance providers

💵 3. Cash Pickup at Agent Locations

Overview

Another popular method for those without bank accounts is cash pickup, available at agent locations nationwide such as banks and MTO partner outlets. This is suitable for recipients who prefer immediate access to cash.

Process:

1. The sender initiates a transaction through a provider like Western Union, Ria, or MoneyGram.
2. Provides:

• Full name of the recipient (matching their ID)
• MTCN or similar reference code

1. The recipient visits a designated bank or pickup agent, presents a valid ID and MTCN, and collects the cash.

Transaction Limits:

• Max pickup per transaction: BDT 100,000
• Larger amounts must be credited to bank accounts

Incentives:

✅ 5% incentive applies to legally transferred remittances
✅ Banks handling the transaction claim reimbursement from Bangladesh Bank

🏢 4. Money Transfer Organizations (MTOs) and Exchange Houses

Overview

MTOs such as Western Union, Ria, Xpress Money, and licensed foreign exchange houses offer a wide network for remittance transfers. These organizations operate under drawing arrangements with Bangladeshi banks, which are pre-approved by Bangladesh Bank.

Process:

1. Sender initiates a transfer through MTO’s web/app or exchange house.
2. The MTO channels the funds via its drawing arrangement partner bank in Bangladesh.
3. Funds are then credited to:

• Bank account
• Mobile wallet
• Cash pickup option

Speed:

• Transfers typically complete within 24–48 hours depending on intermediary bank procedures.

Documentation for High-Value Transfers:

• For amounts above BDT 500,000, income proof or source of funds (e.g., employment letter, license) may be required.

Government Incentives:

✅ 5% remittance incentive is claimable
✅ Must be routed through authorized banks and MTOs

🌐 5. Non-Resident Taka Accounts (NRTA) and Foreign Currency Accounts

Overview

For foreign investors or non-resident Bangladeshis, NRTA and FC accounts provide dedicated, compliant avenues to receive remittances, especially for business or investment purposes.

NRTA Account Features:

• Can be opened without prior Bangladesh Bank approval
• Intended for proposed businesses or investments
• Post-business registration, funds can be shifted to operational accounts

Foreign Currency Account Features:

• Can hold USD, GBP, EUR
• Interest on NFCDs is tax-free
• Principal and interest are freely repatriable

Requirements:

• Valid proof of non-residency (e.g., passport with visa/work permit)
• Documents such as bills of entry, invoices, or capital machinery import permits if linked to investments

Legal Protections:

✅ Free repatriation is guaranteed under Bangladesh Investment Development Authority (BIDA) regulations
✅ Protected from currency control risks if accounts are compliant

🧾 6. Demand Drafts, Telegraphic Transfers & Other Traditional Channels

Overview

While now largely obsolete, traditional methods like Demand Drafts (DDs), Telegraphic Transfers (TTs), Traveler’s Cheques, and Postal Orders are still legally valid and occasionally used by conservative remitters or legacy institutions.

Process:

1. Sender purchases DD from an overseas bank or exchange house
2. Sends DD physically to the recipient in Bangladesh
3. Recipient presents it to a local bank for clearing (usually 3–5 business days)
4. Funds are credited to the recipient’s account

Incentives:

✅ 5% government remittance incentive is available if documentation confirms sender is a wage earner abroad
✅ Must be processed through a bank with drawing arrangements with the foreign sender’s institution

💼 Special Cases: Commercial Inflows and Large Remittances

For Companies and Startups:

• Businesses receiving inward remittances must register the source of funds
• All receipts must be reported under current account transactions or capital account transactions
• Firms importing machinery or capital goods must submit:
• Commercial invoice
• Proforma invoice
• Letter of credit or T/T proof
• Import registration certificate

For Charities and NGOs:

• NGOs must have prior approval from NGO Affairs Bureau
• Funds should be routed through designated FC accounts
• Annual fund use reports and audits are mandatory

✅ Best Practices and Legal Compliance

To ensure smooth foreign currency transactions and avoid legal complications, consider the following:

🟩 Always Use Authorized Channels
Avoid informal “hundi” or illegal remittance methods, which are punishable under the Money Laundering Prevention Act.

🟩 Maintain Documentation
Keep a record of:

• Sender’s passport/work permit
• Bank remittance slip or MTCN
• Purpose of remittance

🟩 Register Foreign Investments
Report foreign equity or loan inflows to Bangladesh Bank via your authorized dealer bank.

🟩 Know Your Rights
Consult legal counsel when handling high-value or commercial remittances, to ensure compliance with:

• Anti-Money Laundering (AML) rules
• Tax regulations
• Investment registration protocols

🔚 Conclusion: Securely Receiving Foreign Currency in Bangladesh

Bangladesh offers multiple legitimate avenues to receive foreign currency from overseas — from direct bank transfers and mobile wallets to MTOs, NRTA, and traditional banking instruments. These channels are regulated to ensure transparency, protect recipients, and uphold the integrity of the financial system.

At TRW Law Firm, we assist individuals, families, investors, and corporate entities with all aspects of foreign currency remittance and investment compliance. Whether you are sending support to loved ones or planning a multimillion-dollar investment in Bangladesh, our legal experts can help you:

• Choose the best remittance structure
• Comply with Bangladesh Bank regulations
• Obtain required permissions or clearances
• Claim government incentives
• Structure inward investments efficiently

📊 Summary Table: Avenues to Receive Currency in Bangladesh

📞 Contact TRW Law Firm

Let us assist you with foreign remittance structuring, compliance, and legal documentation in Bangladesh.

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