Foreign Exchange Law in Bangladesh Explained: the Foreign Exchange Regulation Act 1947, the GFET and the 2026 Circulars

In this guide: What the Act does: a prohibition with permissions · The 2015 amendment and what breach costs · Who administers it: Bangladesh Bank departments and the banks · The Guidelines for Foreign Exchange Transactions 2018 · The consolidated circulars, subject by subject · How to check a rule, and when to apply to Bangladesh Bank

The short answer

Read the Act once, for its shape: ss.4 and 5 prohibit dealing in foreign exchange and paying non-residents except through an authorised dealer; s.8 restricts carrying currency across the border; ss.9, 10 and 13 cover acquisition and surrender of foreign exchange and the export and transfer of securities; s.18 restricts cross-border lending and borrowing and s.18B requires a foreign company’s branch or liaison office to report within 30 days; s.20 lets Bangladesh Bank give directions; s.23 punishes breach. Then stop reading the Guidelines as if they were current and go to the circular in force for your subject: FEPD-1 Circular 40 of 30 September 2026 for any outward payment on current account (dividends, profits, services, travel, education), FEPD-1 Circular 32 of 2 September 2026 for loans and guarantees, FEID Circular 01 of 2025 for share issues and FEID Circular 01 of 8 March 2026 for share transfers, FEID Circular 03 of 15 July 2026 for parent-company loans, FE Circulars 31 and 33 of 2025 for imports, and FEPD-1 Circular 10 of 11 May 2026 for the trade-finance ceiling. Each of the annual circulars expires about a year after issue and is replaced, so check the Bangladesh Bank circular page for the current number before relying on a figure. Where no circular speaks, the Guidelines apply; where neither permits what you want to do, you apply to Bangladesh Bank through your bank. The sections below explain each layer; the topic guides in this category (repatriation, loans, share money) apply them.

What the Act does: a prohibition with permissions

The structure matters more than the detail: the Act prohibits, and everything an investor does is a permission, either a general permission (a circular telling banks they may remit dividends on stated documents), or a specific permission (Bangladesh Bank’s letter approving a liquidation remittance). When a bank says “Bangladesh Bank does not allow it”, the accurate statement is usually that no general permission covers it, and the question is whether a specific one can be obtained.

The 2015 amendment and what breach costs

The Foreign Exchange Regulation (Amendment) Act 2015 modernised the 1947 text: it updated the definitions, substituted s.18B for the old branch-reporting provision and repealed s.18A, strengthened Bangladesh Bank’s powers of direction and inspection, and rewrote the penalty provisions so that, besides prosecution before the courts with imprisonment and fines, Bangladesh Bank itself may impose administrative penalties on authorised dealers for breaches of the Act and its directions. Later amendments adjusted the text further. Section 23, as amended in 2015, provides imprisonment of up to seven years, a fine or both, with confiscation of the currency or property involved, tried by the tribunal under section 23A; Bangladesh Bank’s power to fine authorised dealers is in section 3(5). Several secondary summaries still quote the 1947 scale. In practice the enforcement an investor is most likely to encounter is not a prosecution but a bank that will not process the transaction, a Bangladesh Bank inspection of the bank’s file that leads to a query to the company, or, for an individual, the Money Laundering Prevention Act 2012, under which sending money abroad through hundi or an unlicensed channel is both a foreign-exchange offence and a predicate offence for money laundering, investigated by the Bangladesh Financial Intelligence Unit and the Criminal Investigation Department. The practical rule is the same as everywhere in this category: use the banking channel, keep the paper, and apply for permission before rather than after.

Who administers it: Bangladesh Bank departments and the banks

Three Bangladesh Bank departments issue the rules that matter to investors. The Foreign Exchange Policy Department (its circulars are numbered “FE Circular” until 2025 and “FEPD-1 Circular” since) issues the general rules on imports, exports, remittances, loans and accounts. The Foreign Exchange Investment Department (“FEID Circular”) handles foreign direct investment, share issues and transfers, repatriation, branch and liaison offices and parent-company loans, and receives the 14-day and 30-day reports described in the other guides. The Foreign Exchange Operations Department handles reporting, inspection and the approvals that the circulars reserve to Bangladesh Bank, and the Statistics Department compiles the quarterly investment and loan data the banks send. Below them sit the authorised dealers, the banks licensed under s.3, which open the accounts, issue the encashment certificates, remit on the circulars’ authority and file the reports; a company nominates one of them for its foreign-exchange dealings and tells FEID which. Offshore banking units, placed on a statutory footing by the Offshore Banking Act 2024, deal in foreign currency with non-residents and zone enterprises and may open the temporary and convertible accounts the newer circulars allow. Invest Bangladesh (formerly BIDA) is not a foreign-exchange authority, but Bangladesh Bank’s circulars make its authorisation a precondition for private foreign loans and its permission the basis of a branch or liaison office’s existence, which is why the two systems have to be read together.

The Guidelines for Foreign Exchange Transactions 2018

The Guidelines are Bangladesh Bank’s consolidation of its directions under s.20, issued in two volumes. Volume 1 is arranged by transaction: authorised dealers and money changers; imports and exports; foreign investment (Chapter 9, whose paragraphs 2(A) and 2(B) on reporting share issues and transfers are still the provisions the 2025 and 2026 circulars cite); commercial remittances; private remittances and travel; foreign-currency and non-resident taka accounts; borrowing and lending; and the special regimes for zones. Volume 2 is the reporting code: the returns, schedules and forms (Form C for inward remittances above US$20,000, Form TM for outward, the encashment certificate at Appendix 5/39 and 5/40, the Appendix-4 loan return, Appendix-9 for dividends) through which the banks report to Bangladesh Bank. Until 2025 a practitioner answered most questions by citing a Guidelines paragraph and the circulars that had amended it since 2018. That is no longer safe. The consolidated circulars of 2025 and 2026 each state that they repeal the earlier instructions on their subject, including the corresponding Guidelines chapters, and only Volume 2 and the chapters not yet consolidated continue to apply as written. The Guidelines remain the place to find a rule nobody has re-issued, the definitions, and the forms; they are no longer the place to find the current limit on a dividend, a loan or a travel allowance.

The consolidated circulars, subject by subject

The annual circulars are expected to be re-issued around September each year. The replacement usually keeps the structure and changes a handful of figures, which is exactly where a guide, a bank officer or a client relying on last year’s number goes wrong.

How to check a rule, and when to apply to Bangladesh Bank

1. Find the current circular for the subject on Bangladesh Bank’s circular page (filter by department: FEPD, FEID, FEOD) and check its validity line; if it has expired, look for the replacement of the same title.
2. Read the repeal clause at the end: it tells you which earlier circulars and Guidelines chapters no longer apply.
3. Check the portal and FAQ against the circular, not the other way round. Bangladesh Bank’s FEID portal and its FAQ still show the 50:50 taka loan ratio, the SOFR + 4% ceiling and the pre-2026 share-sale tiers; the circulars govern.
4. Ask the bank for the general permission it is relying on when it processes a transaction, and keep the reference with the file; when it refuses, ask which instruction it reads as requiring approval.
5. Apply to Bangladesh Bank through the bank, not directly, where a specific permission is needed: liquidation remittances, share sales outside the 2026 tiers, repatriation of property sale proceeds, remittances above the circular limits, and anything the circulars reserve. The application is the bank’s forwarding letter with the documents the relevant annexure lists; Bangladesh Bank answers the bank.
6. Record the permission and the reports in the company’s statutory file alongside the RJSC papers; the foreign-exchange record is what every later transaction in this category depends on.

We maintain a circular tracker for client companies and review each new consolidated circular against their standing arrangements the week it issues. The date at the top of this guide is the date of its last check.