No headway has yet been made in opening branches of some Bangladeshi scheduled banks in Kingdom of Saudi Arabia (KSA), officials said.
The move for opening more branches in KSA by some commercial banks is now at a standstill due to a lack of necessary approval from the monetary authorities there, they added.
The Bangladesh Bank has requested the government to expedite the move after the banks concerned submitted their applications.
The central bank also requested the government to take required steps through diplomatic channel for getting cooperation of the Saudi Arabian Monetary Authority (SAMA).
Four commercial banks--Sonali, Islami, Exim and Social Islami--have already got approval from the central bank of Bangladesh to open their branches in KSA.
"We've earlier given permission to four commercial banks to open branches in Saudi Arabia," said a central banker with full knowledge of the issue.
The move to open branches of some Bangladeshi banks has been taken as per the decision taken at a meeting of the Bangladesh-Saudi Arab Joint Commission and on instructions of the finance ministry, a BB document mentioned.
Earlier, the Saudi government allowed Bangladeshi banks to open branches there to help Bangladeshi expatriates send remittance home, he added.
On November 19, 2019, the regulator has given approval in principle to Islami banks to open four branches in Riyadh, Jeddah, Dammam and Medina.
The regulator has also given approval in principle to Exim Bank for opening branch in Riyadh.
Islami and Exim banks have appointed international consulting firms for submitting applications to the SAMA.
They have now in initial stage to submit applications including credit ratings according to the demand of the SAMA.
In September 2019, Social Islami Bank formally submitted application to take a licence from the SAMA to open a branch after completion of all necessary works to this end. But the bank is yet to get any positive response from the SAMA although a year has passed, the document reads.
Sonali Bank has only taken approval from the BB to open its branch in Riyadh. But there is no visible progress in this regard. The bank authority has yet to take any step to prepare required business plan, according to a source.
However, private bankers think that setting up of branches in KSA will be a challenge for private or state banks.
"No bank branch can survive there only through collecting remittance. They will have to provide other banking services," a senior banker said.
Currently, local banks are collecting remittance through banking arrangements, exchange houses and money transfer companies.
Bangladesh is now one of the largest recipients of remittance in the world. And KSA has been the largest hub of foreign remittance into Bangladesh.
The United Arab Emirates (UAE), Qatar, Oman, Bahrain, Kuwait, Libya, Iraq, Singapore, Malaysia, the USA and the UK are also major sources of remittance inflows.
Bangladesh received US$18205.01 million in remittance in the fiscal year (FY) 2019-20, a significant portion of the amount from KSA.
Of the total, it bagged $ 10561.31 million from top five destinations with Saudi Arabia being the largest source of remittance.
Non-resident Bangladeshis (NRBs) living in KSA sent $ 4015.16 million in the fiscal year. Local banks have long been collecting remittances from KSA through banking arrangements with different banks.
Earlier, country's two commercial banks--Janata Bank and Standard Bank Ltd (SBL)--backtracked on their decision to open their branches in Saudi Arabia.
