Bangladesh Bank has relaxed the offshore banking policy. Banks will now be able to invest up to 30 percent of their capital from domestic sources of funds abroad. And if the transfer of Domestic Banking Unit (DBU) funds through Offshore Banking Operations (OBO) of a bank exceeds the limit of 30 per cent, it has to be adjusted by December this year.

Bangladesh Bank approved offshore banking activities in Bangladesh since 1985 to collect funds from outside the country and distribute them to export-oriented institutions. In light of the existing policy, CRR for offshore banking has to be maintained at 2 per cent instead of 4 per cent.

Offshore banking is a separate banking service within a bank. Offshore banking is different from conventional banking or branch operations. Because in such activities both deposit taking and lending activities come from foreign sources and are offered to foreign customers.

Source-Bangladesh Bank