Foreign Exchange Policy Department

Name of Deputy Governor: Ziaul Hassan Siddiqui Name of Executive Director: Md. Ahsanullah Name of General Manager: Ahmed Jamal Functions of Foreign Exchange Policy Department (FEPD) The FEPD is responsible for formulating and implementing policies related to foreign exchange and makes institutional arrangements for receipts and payments and settlements with the external world in terms of the authority vested in Bangladesh Bank by the Foreign Exchange Regulation (FER) Act. 1947 as adapted in Bangladesh specifically, 01. It sets the criteria and conditions for holding and dealing in foreign exchange by resident entities and issues licenses to Authorised Dealers and Money Changers. 02. It sets supervisory and monitoring guidelines for offsite and onsite supervision of foreign exchange transactions and formulates & implements instructions regulating inflows and outflows on external settlements in both the current and capital accounts, including external borrowings and amortization payments. 03. It formulates policies and makes institutional arrangements in regards to exchange rates. 04. It maintains liaison between the Bangladesh Government and foreign bilateral/multilateral agencies on the issues of (I) external trade (II) Receipt and utilization of official grants/Loans (III) Private inflows of remittances, etc. 05. It initiates legal proceedings to address violations of Foreign Exchange Regulation Act-1947 as adapted in Bangladesh. 06. It monitors reporting of foreign exchange receipts against exported goods and receipt of goods against payment from Bangladesh. 07. It supervises and monitors Authorised Dealers (AD) and ensures compliance of ADs with the prudential supervisory limits on their open exchange positions. This department of central bank constitutes of six sections. The sections are listed below: 1. Foreign currency section. 2. Letter of credit monitoring section 3. Import policy section. 4. Export policy section

5. Remittance policy section. 6. Accounts and non-funded business. 7. Licensing and drawing arrangement section. 8. Discount section. 9. Legal compliance and enforcement section. These sections have their own specific functions and to perform in a proper way they need some tools too. The functions and different tools of the sections under FEPD are described in brief in the later portion. 1. Foreign currency section The reports this section prepare are: a. Daily exchange position report. b. Interbank transaction report. c. Daily rate sheet. d. Two-way quotation.
e. Nostro Account monthly quotation.

f. Nostro quarterly report. 2. Letter of credit monitoring section Functions: a. Offsite supervision through collection of daily, weekly, fortnightly, monthly, quarterly statements from banks. b. Monitors NGOs foreign donation received through banking channel.
c. Press release on commodity price.

3. Import policy section Functions: a. Prior approval for Revolving L/C or Stand by L/C. b. Approval of payments over USD 1000. c. Communicate their opinion to Government regarding bilateral or multilateral contracts. d. Receive or issue complains regarding bilateral trade. 4. Export policy section

Functions: a. Providing cash incentives to seventeen industries. b. Investigation related to export related disputes. 5. Remittance policy section Functions: a. Prior approval against outward remittance where necessary. b. Issue circulars on inward or outward remittance. 6. Accounts and non-funded business policy section Functions: Provide guidelines for different types of foreign currency accounts and non- funded businesses. Chapter 13 & 14 provide these guidelines for different types of FC accounts. 7. Licensing and drawing arrangement section Functions: This section provides following licenses and provides guidelines for arrangements.
a. Authorized dealer license.

b. Money changing license. c. Drawing house arrangements. Although it provides $ 25, 000 as guarantees, weekly report collection and provides information to Parliament, Government and other Government agencies. 8. Discount section Functions: a. Provide discount against export discrepancy b. Form discount committee.

9. Legal compliance and enforcement section Functions:

a. Take legal action for violation of GFET, 2009 and FERA, 1947.

Citizen Charter

1. Services provided to Banks & other financial institutions:

i.

Provides authorized dealer license. Formulate foreign exchange transaction policies and issue guidelines, FE circulars and circular papers to transmit them. Provide permission for special transactions. Clarify the confusions aroused regarding foreign exchange policy.

ii. iii. iv.

2. Services provided to Government:

i.

ii. iii. iv.

Analyze credit detail, credit that provided by external sources to Government, and issue guarantee in favor of the credit provider on behalf of the Government. Transmit information regarding remittance and import to concerned bodies. Provide advice regarding foreign exchange transaction. Implement Government subsidies to provide incentives to export oriented sectors.