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Monetary Jurisdiction of the lower courts increased

Bangladesh Parliament on 12 May 2016, passed the “Civil Courts (Amendment) Act, 2016”. It will amend the Civil Courts Act, 1887. It will expand the monetary jurisdiction of lower court judges.

According to the amendment, district judges will try civil cases with suit value of Tk. 5 crores instead of existing Tk. 5 lakhs. Assistant judges will try civil cases with suit value of Tk. 15 lakhs from Tk. 2 lakhs and senior assistant judges Tk. 25 lakhs from Tk. 4 lakhs.

Purpose of the amendment is to lessen the burden of the High Court.

Economic zones are exempted from BOI and Local Government Tax

All economic zones and all entities established in the economic zone in Bangladesh are exempted from the requirements of Board of Investment. They are also exempted from the taxation of Local Government (Pourosova). Bangladesh government on 25th April 2016 published two gazettes in this regard.

Usually, a company is required to obtain certain approval and registration from the Board of Investment (“BOI”) while operating in Bangladesh. In some cases, it is very much difficult to import capital machinery without certain documents from BOI. Since the economic zones are exempted from this requirement, we are yet to see how this will be played out in practice.

Pourosova usually imposes certain tax on the business entities established/operating within its jurisdiction. Economic zones are exempted from these taxation from now on.

NBFIs allowed to hold meetings via video conference with BB approval

Non-Banking Financial Institution can now hold board meeting, executive committee meeting or audit committee meeting through video conference if necessary while their chairman or any director are staying outside Bangladesh. However, they must obtain prior approval of Bangladesh Bank.

Bangladesh Bank through a circular being number DIFM Circular No. 05 dated April 18, 2016, introduced this restriction.

NBFI can invest in Alternative Investment Fund – Bangladesh Bank

Non-banking financial institutions (FI) can now invest in the non-listed special purpose funds (e.g. Alternative Investment Fund, Special Purpose Vehicle, or any other similar fund) which are registered with Bangladesh Securities and Exchange Commission (BSEC). Through DFIM Circular No.04 dated 30 March 2016, Bangladesh Bank allows such investment.

On November 24, 2015, Bangladesh Bank issued a similar circular allowing the commercial banks to invest in such funds.

FI should follow the following guideline while investing in the non-listed special purpose funds:

1. The aggregate investment in such funds made by any FI shall not exceed 50 percent of its paid up capital.

2. The investment in such a single fund made by any FI shall not exceed 10 percent of its paid up capital or 20 percent of that particular fund, whichever is lower. [Read more…] about NBFI can invest in Alternative Investment Fund – Bangladesh Bank