An initiative has been taken to withdraw the upper ceiling on investment in wage earners development bonds for expatriate Bangladeshis. With this, the authorities aim to lure expatriate professionals and businesses to invest at home, clear ways for foreign investments, and increase inflow of remittances.
The expatriate welfare and overseas employment ministry issued a letter to Abdur Rahman, Khan, secretary of the internal resources division (IRD), on Wednesday, asking him to take action in this regard.
The wage earners development bond was introduced in 1981, with a maturity period of five years.
Asked about the issue, the IRD secretary declined to make any comment and claimed that he has not yet received any letter over the issue
According to the Wage Earners Development Bond Rules, 1981 (amended on 23 May, 2015), there was scope to invest any amount in the bond. However, during the Covid-19 outbreak, the IRD issued a notification on 3 December, 2020, imposing an investment limit of Tk 10 million (or its equivalent in foreign currency) on wage earners development bonds, US dollar premium bonds, and US dollar investment bonds.
The cap on US dollar premium bonds and US dollar investment bonds was lifted later on 4 April, 2022, allowing unlimited investments.
However, the investment limit for wage earners development bonds remains unchanged, with no provision for auto reinvestment. Hence, expatriates are being forced to withdraw their investments.
In its letter, the expatriate welfare ministry told the IRD secretary that the upper ceiling on investment should be abolished or relaxed to boost remittance inflows and attract more investment from expatriates.
On Tuesday, expatriate welfare and overseas employment adviser Asif Nazrul told the media that he proposed to cancel the ceiling of Tk 10 million on the purchase of wage earners development bonds.
“It needs the assistance of Bangladesh Bank, and I hope Bangladesh Bank will facilitate this,” he said, expressing optimism for more remittance in the coming days.
These bonds can be purchased from offshore and authorised dealer (AD) branches of Bangladesh Bank, exchange houses, exchange companies, and scheduled banks. Its profits are free from the tax net. Also, there are scopes to take loans against the bonds, and there is no requirement to have a foreign currency (FC) account to buy these bonds.
Foreign exchange earners themselves can invest in these bonds, or invest in the name of their nominee. Government employees who serve in Bangladesh missions abroad are also eligible to invest in Wage Earners Development Bonds.
It was learned that the IRD will present a summary of the proposal to finance and commerce adviser Salehuddin Ahmed for approval next week. Once it gets approval, the IRD will issue a notification, while the central bank and the national savings directorate will implement.
When asked about the matter at the secretariat on Thursday, adviser Salehuddin Ahmed told Prothom Alo that the proposal should be submitted first before any further comments can be made.