BNBL makes Nu 768mn net profit in 2021

BNBL introduces Foreign Currency Accounts

To enhance financial flexibility and the ability to hold and manage funds in various currencies by its clients

In a move geared towards expanding financial options and bolstering economic resilience, The Bhutan National Bank Ltd. has introduced Foreign Currency Accounts (FCA) for its citizens. This initiative, spearheaded by the Royal Monetary Authority (RMA), aims to provide individuals with the ability to hold and manage funds in various currencies, thereby diversifying the financial landscape of the nation.

An official from BNBL said, “The FCA will allow Bhutanese individuals residing within the country to access a host of benefits previously unavailable.” Among these benefits are the opportunity to earn interest on foreign currency deposits and the eligibility for a per-travel cash allowance of up to USD 3000.

Moreover, the official said that FCAs can facilitate seamless international transactions, including the sending of student allowances of USD 4,800 per month to third countries and INR 100,000.

One of the key advantages of FCAs is the full accessibility they offer through international debit cards, allowing account holders to make payments and transfers both domestically and internationally.

Additionally, FCAs can be seamlessly integrated into the mobile banking infrastructure, providing users with convenient access to their accounts at any time.

However, with the introduction of FCAs, there come challenges, notably the inherent risk associated with holding foreign currency in cash. Efforts are underway to mitigate these risks and ensure the safety and stability of the financial system.

Regarding eligibility, all Bhutanese individuals residing in the country are eligible to open an FCA. For Bhutanese citizens living abroad, the option remains available through Remit Bhutan, facilitating greater financial inclusivity for the Bhutanese diaspora.

Opening an FCA is a straightforward process. Existing customers need only visit their nearest branch and fill out a form, while new customers are required to provide a copy of their Citizenship Identity Card (CID) along with two passport-size photographs.

The introduction of FCAs is expected to have a positive impact on Bhutan’s foreign currency reserves. As customers deposit funds into their FCAs, these deposits contribute to the nation’s external reserves, enhancing economic stability and resilience.

The chief executive officer (CEO) of Heavenly Bhutan Travel, Raju Rai said that the tour operators had to earlier undergo lengthy process having had to wait long for the money transfer.

The CEO said, “FCA will ease the business as it has increased the efficiency.” With hassle free process, tour operators now can convert themselves through mPay. The CEO shared that it will reduce burden in making payments to immigration and airlines.

Similarly, the CEO of Teem Travel Bhutan, Hemlal Sharma said that in the past, there was lengthy process in making tourists’ travel related payment. With initiatives of FCA by BNBL, the CEO said that now the tour operators can make direct payment to hotels, immigration and Department of Tourism through mPay.

However, the CEO said, “The financial institutions still need to improve financial services.” He highlighted that everything in turn will improve, including Foreign Currency Reserve and tourists arrival.

Another tour operator based in Thimphu said that it would be more convenient and will manage  all currency transactions in one place, but should be simple and reliable to customers and clients.

Overall, the introduction of FCA represents a significant step forward in Bhutan’s financial sector, providing citizens with greater financial flexibility and access to international financial services. As Bhutan continues to embrace financial innovation, the official reiterated that FCAs stand out as a testament to the nation’s commitment to economic growth and prosperity.

“People are urged to refer to the Foreign Exchange Rules and Regulations (FERR) and the Foreign Exchange Operation Guidelines, available on the RMA website,” the official said.

By Sangay Rabten, Thimphu