The Business Standard 23 August 2020
The Bangladesh Bank has allowed non-resident Bangladeshis (NRBs) and foreigners to invest in the open-end mutual funds from the balances in their non-resident taka accounts.
The central bank has made the decision in a bid to widen investment scope for NRBs and foreign investors setting a number of conditions.
A Bangladesh Bank circular issued in this regard on Thursday said, “The balances held in non-resident investors taka accounts (NITA) can be used to purchase units of open-end mutual funds as over the counter (OTC) products.”
According to the circular, the asset managers of the mutual funds have to contact the central bank’s Foreign Exchange Investment Department within 14 days of issuing units of the mutual funds.
Banks have also been allowed to credit the NITAs with the sale proceeds of the units of mutual funds on receipt of the central bank’s approval.
However, an application along with a valuation report of the funds prepared by merchant banks or chartered accountants must be filed to the BSEC if the weekly net asset value of the mutual funds are published irregularly or the underlying investments in unlisted shares or securities exceeds 30 percent of the total fund.
In other cases, a recommendation letter from the trustee on the fair value of the fund must be sent to the central bank.
Banks have also been allowed to freely transfer dividend and sale proceeds to the NITAs upon written prayers to fund managers by the unit holders.
Open-end mutual funds are collective investment schemes without any predetermined tenure. In Bangladesh, these are not listed in stock exchanges. Investors can buy and sell its units from the asset manager or their authorised agents.
