Offshore banking in Bangladesh & Shahjalal islami bank ltd,(OBU) operations in Bangladesh.
Department of International Business,
University of Dhaka.
Sujoin Saha (17)
Ariful Hoq Ahmad (55)
Department of International Business (2nd Batch),
Course Name: Business Analysis in National & International Context Course Code: IB-407.
Date of Submission: 15th April 2013
Table of Contents
2.Overall offshore banking condition in Bangladesh4-6
3.List of national and foreign banks that are performing offshore banking6-7 4.Activities of SJIBL8
5.OBU services of SJIBL
6. Advantages and Disadvantages of offshore banking in context of SJIBL
7.Recommendation and Conclusion12-13
Bangladesh has a vibrant banking industry. The term “Offshore Banking” has recently been emerged as a decisive issue in this industry. Offshore banking comes from Channel Islands that are offshore from the United Kingdom. Although most of the centers providing such services are located on island state. Offshore banking has been popular because of the speed up in the recent inward inflow of remittance by NRBs. Moreover it has been playing a critical role in FDI inflow in our country. It has a very significant role in boosting up our economy by amalgamating foreign currency and putting it into productive sectors like EPZs and annihilating poverty by devising new employment facilities. For these reason Bangladesh Bank (BB) has also relaxed the regulations regarding offshore banking in our country. Most of the banks have opened its Offshore Banking Units (OBU) in the EPZ areas and as did the Shahjalal Islami Bank Ltd. (SJIBL). Here we are going to discuss about the activities of SJIBL’s offshore banking activities and its existing opportunities and possible shortcomings that may affect it adversely.
Overall offshore banking condition in Bangladesh:
An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages. These advantages typically include: •greater privacy
•low or no taxation ( tax havens)
•easy access to deposits (at least in terms of regulation) •protection against local, political, or financial instability
Bangladesh is strategically located as a potential hub of regional trade. Roads, bridges, and ports are being developed for facilitating transit routes for regional trade through Bangladesh. Regional energy grid is being developed for enhancing energy security. Bangladesh offers excellent opportunities and facilities for foreign investment. No prior permission is required for investment in industrial sector (except for four reserved sectors including defense equipment, reserve forestry, atomic energy, currency printing and minting). Investment proposals need only to be registered with the Board of Investment (BoI). There is no ceiling on percentage of foreign ownership; both wholly foreign owned and joint ventures are permissible. In order to stimulate rapid economic growth of the country, particularly through industrialization, the government has adopted an 'Open Door Policy' to attract foreign investment to Bangladesh.
Offshore finance is one of the few industries, along with tourism, in which geographically remote island nations can competitively engage themselves in related operations. As offshore banks are mostly located in a jurisdiction with sound economic and political conditions, it provides stability. It helps developing countries to source investment and promote accelerated growth in their economies, and redistribute world finance from the developed to the developing world. It is then a great way for developing countries to enhance their economic...