Bangladesh Bank has directed banks to ensure that remittances sent from abroad are deposited into customer accounts on the same day or the next working day.
The directive has been given to reduce delays in the cross-border payment process, increase efficiency and improve customer service.
Issuing a circular in this regard on Thursday (January 8), the central bank said that the directive will come into effect immediately.
However, banks have been given time until March this year to fully implement it.
The circular states that authorized dealer (AD) banks will have to inform the concerned customer through secure electronic means as soon as they receive the remittance message.
Remittances received during banking hours will be deposited into the customer's account on the same working day and remittances received after banking hours will be deposited into the customer's account on the next working day.
To speed up the process, Bangladesh Bank has advised banks to follow Straight-Through Processing (STP) or risk-based faster processing method. If the necessary information is available, the money can be deposited into the customer's account even if some documents or verification processes are pending.
The necessary formalities will have to be completed later. However, in cases where post-credit review is not possible, it has been instructed to complete the verification before depositing the money and settle the transaction within a maximum of three working days.
In addition, to speed up the settlement of remittances, instructions have been given to use intraday credit confirmation by reducing the reliance on the 'Nostro' account statement at the end of the day.
At the same time, emphasis has been placed on improving the reconciliation system and completing it within 60 minutes.
The circular has given special emphasis on increasing payment tracking and transparency. It has been directed to use Unique End-to-End Transaction Reference (UETR) to follow the entire process from receipt of inward remittance to final deposit in the customer's account.
It has also been said that the requirements related to Form 'C' and Form 'C (ICT)' will be abolished in stages by strengthening the digital foreign exchange platform.
The business community has welcomed the initiative. According to them, this will increase customer confidence and Bangladesh's remittance processing system will be more consistent with global best practices.
However, bankers have also warned of facing some operational challenges during the transition period.
