The government has taken the initiative to withdraw the investment limit in Wage Earners Development Bonds for expatriate Bangladeshis. This initiative has been taken on three grounds. The arguments are to invest the money of expatriate professionals and businessmen in the country, facilitate foreign investment and increase the inward flow of expatriate income (remittances).

The Ministry of Expatriate Welfare and Foreign Employment has sent a letter to the Internal Resources Department (IRD) Secretary Abdur Rahman Khan to take action in this regard on Wednesday. A five-year Wage Earners Development Bond was introduced in the country in 1981. Profit is earned on simple interest.

IRD Secretary Abdur Rahman Khan told to press about this last Wednesday that he has not yet received any letter regarding this. So he cannot comment on this.

As per the Wage Earners Development Bond Rules, 1981 (amended on 23 May 2015), any amount of money was allowed to be invested. During the outbreak of Covid-19, the IRD, through a notification on December 3, 2020, set a combined investment limit of one crore foreign currency equivalent in Wage Earners Development Bonds, US Dollar Premium Bonds and US Dollar Investment Bonds. Then on April 4, 2022, the cap on US dollar premium bonds and US dollar investment bonds was lifted. As a result, any amount of investment is coming in these two bonds. However, the investment limit of Wage Earners Development Bond has not been withdrawn. Again, there is no possibility of automatic reinvestment of this bond money. As a result expatriates are forced to withdraw the money invested earlier.

Referring to these things, the letter also said that various organizations of expatriates have been demanding to lift the investment limit of Wage Earners Development Bond. On behalf of the embassies, ambassadors and high commissioners have also written letters informing them of lifting the limit.

The Ministry of Expatriate Welfare and Foreign Employment has told the IRD Secretary that the ceiling on investment in Wage Earners Development Bonds needs to be abolished or relaxed to increase expatriate income flow as well as investment by expatriates.

Asif Nazrul, adviser on expatriate welfare and foreign employment, told reporters on Tuesday, “I have proposed to cancel the limit of one crore taka on the purchase of wage earnings bonds. It will require the assistance of Bangladesh Bank, I hope Bangladesh Bank will do it. He commented that more expatriate income will come through this bond.

These bonds can be purchased at foreign and authorized dealer (AD) branches of Bangladesh Bank, exchange houses, exchange companies and scheduled banks. The profits of this bond are exempt from income tax. Again there is an opportunity to take a loan against the bond. Apart from this, there is no obligation to have a foreign currency or foreign currency (FC) account to buy bonds.

A foreign exchange earner (wage earner) can invest in this bond. A wage earner can also invest in these bonds in the name of his nominee. Government employees working in Bangladesh embassies abroad can also invest in Wage Earner Development Bonds. Investing in it has a financial benefit of 40 to 50 percent mortality risk.

A death benefit is a financial benefit that is given to a nominee or person nominated by the bondholder in case of death before maturity. However, the death benefit is not more than 20 lakh rupees and the age of the bond holder must be below 55 years. To avail the death benefit, the application must be made within three months of death. After the death of the bondholder, his heirs will receive the principal and profits on maturity of the bond.

While the profit is 12 percent in foreign currency equivalent to Tk 15 lakh, 11 percent from Tk 1.5 lakh to Tk 30 lakh, 10 percent from Tk 1.30 lakh to Tk 50 lakh and 9 percent profit is available from Tk 1.50 lakh to Tk 1 crore.

It is learned that the IRD will present a summary of a proposal on this matter to Finance and Commerce Advisor Salehuddin Ahmed for approval next week. If approved by Finance and Commerce Adviser, IRD will issue notification, which will be implemented by Bangladesh Bank and National Savings Directorate. However, as the profit will be paid from the state treasury, it may also require the opinion of the finance department and Bangladesh Bank.

When asked about this, Finance and Trade Advisor Salehuddin Ahmed told press, “Let the proposal come first.”