“It is accurate to state that the majority of banks are currently refraining from initiating new student accounts. Moreover, businesses are encountering difficulties in establishing letters of credit (LC) amidst the ongoing dollar crisis,” mentioned Syed Mahbubur Rahman, the managing director of Mutual Trust Bank.
For more than a year now, numerous Bangladeshi students aspiring to pursue education abroad have faced challenges when attempting to create essential bank profiles for covering their tuition fees and other expenses such as accommodation and transportation.
Initially, authorities attributed the issue to a limited foreign exchange reserve, assuring that it was temporary and would be resolved promptly.
Despite some improvements in remittance and export earnings noted in January of this year, the situation persists, leaving hopeful students and their aspirations in a state of uncertainty.
Since July 2022, The Daily Star conducted interviews with a dozen students planning to pursue higher education abroad to gauge the current landscape.
According to their accounts, most banks have ceased opening new student accounts, while others demand significant lobbying efforts, substantial deposits, and impose high fees and dollar exchange rates.
Robiul Islam encountered significant challenges in setting up a bank account for his admission to an Australian university, only succeeding after visiting 20 branches due to his father’s transaction history with Islami Bank.
Similarly, Rubaet Hossen required a recommendation from a central bank official to open an account at a private bank for his studies in the United States.
One student shared that several banks requested a deposit ranging from Tk 15 lakh to Tk 18 lakh as a Fixed Deposit Receipt (FDR) before initiating student accounts.
Preferring anonymity, the student also mentioned that these banks imposed additional fees and charged the highest exchange rates at Tk 128 to Tk 130 per US dollar.
Among the limited banks facilitating foreign transactions for students, Standard Chartered Bank processed 4,870 student accounts last year, an increase from 3,787 the previous year.
Naser Ezaz Bijoy, the chief executive officer at SCB, emphasized that they continue to process student accounts as most private banks have halted this service.
Following the post-pandemic period in 2021, the country experienced a faster increase in import payments compared to remittance earnings and exports, leading to a shortage of US dollars in banks.
The forex crisis escalated in mid-2022 due to the surge in prices of essential goods and commodities globally following the supply chain disruptions resulting from the Russia-Ukraine conflict.
Data from the Bangladesh Bank revealed that the central bank injected over $28 billion from its reserve to address the forex shortage.
Syed Mahbubur Rahman highlighted that there is still a scarcity of dollars in the market, with the central bank continuing to supply US dollars to banks from the reserve.
Between July and January of the current fiscal year, the Bangladesh Bank sold approximately $8 billion to banks from the reserve.
Rahman acknowledged the prevailing challenge of banks refraining from opening new student accounts and businesses struggling to establish letters of credit (LC) due to the same reason.
However, he expressed optimism about the increasing export and remittance earnings, indicating a positive trend that could potentially resolve the ongoing crisis in the near future.
In January, remittance earnings saw a 7.69 percent year-on-year increase, reaching $2.10 billion, marking the highest monthly inflow in seven months.
Conversely, export earnings in January achieved a record high of $5.72 billion, the highest ever recorded in a single month.
From July to November of the current fiscal year, \(240 million was remitted abroad for higher education purposes, slightly higher than the \)235 million recorded during the same period in the previous fiscal year, according to the latest Bangladesh Bank data.
A senior official from the central bank noted that the limited increase in remittances for education abroad was partly due to banks’ restrictions on opening student accounts, despite the growing demand for higher education overseas.
Typically, banks face pressure to open student accounts during the June-July period when foreign universities commence their admissions processes.
In 2022, a total of 49,151 Bangladeshi students pursued studies abroad in 58 countries, as per the latest data from the United Nations Educational, Scientific and Cultural Organization (Unesco).
This figure represents a significant increase from 24,112 students in 2013 and 16,609 students in 2008.
The United Arab Emirates emerged as the top destination for Bangladeshi students, hosting 11,157 students, followed by the USA with 8,665 students, and Malaysia with 6,180 students.
Other preferred destinations include the UK, Australia, Canada, Germany, Japan, and various European countries, reflecting the diverse choices of Bangladeshi students seeking international education opportunities.