Bangladesh Bank has paved the way to launch international digital payment and money transfer services, including PayPal and Payoneer, in the country.
Under a new policy framework, domestic banks can now partner with foreign digital payment service providers to facilitate cross-border digital transactions.
The central bank's Foreign Exchange Policy Department issued a circular regarding the matter on Wednesday (July 29).
The new structure has been introduced to simplify international service trade, expand digital financial inclusion, and modernize as well as streamline the country's foreign transaction systems.
The new guidelines introduce a "Bank-Intermediated Framework." Under this arrangement, local banks can offer services through partnerships with foreign digital payment service providers, online payment gateways, digital platforms, and other legitimate international payment solution providers.
According to the directive, banks will facilitate the opening of digital wallets or stored-value accounts known as "Digital Value Accounts (DVA)" for customers.
However, these accounts will not operate independently. Each DVA will be linked to a central "Master DVA" or settlement account managed directly by the respective bank.
To ensure transaction transparency and security, banks must maintain separate ledger records and implement real-time monitoring systems.
Any unused funds will remain under the bank's control and must be refunded or adjusted in accordance with prevailing regulations.
Under the new framework, individuals, businesses, and freelancers can execute various foreign currency transactions.
Foreign currency can be utilized within permissible travel quotas for personal, medical, or official trips abroad.
Additionally, users can spend up to $300 per transaction for small-scale online international purchases or fee payments.
The digital wallets can also be used to pay membership fees, IT-related expenses, visa processing fees, and online hotel bookings.
This facility can be utilized against Export Retention Quota (ERQ) and Resident Foreign Currency Deposit (RFCD) accounts.
Up to three top executives of an ERQ account-holding institution will be permitted to use DVAs for official business expenses.
Furthermore, freelancers and e-commerce entrepreneurs will be able to repatriate their foreign earnings more easily, which is expected to boost foreign exchange inflows.
Foreign nationals and tourists visiting Bangladesh will also be able to make digital payments at local merchant points using this system.
Before rolling out these services, participating banks must submit detailed technical specifications, security infrastructure plans, and operational framework details to Bangladesh Bank's Foreign Exchange Policy Department to secure prior approval.
Banks must also strictly adhere to all Anti-Money Laundering (AML), Know Your Customer (KYC), and Combating the Financing of Terrorism (CFT) regulations, alongside submitting regular transaction reports to the central bank.