Bangladesh Bank Proposes New Maldives Branch Expansion
The move aims to capture remittance flows for workers by establishing formal banking channels in the Maldives.
Updated on Oct. 22, 2026 in Financial Services
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Bangladesh Bank is seeking approval from the Maldives Monetary Authority to establish formal bank branches in the Maldives to streamline worker remittances. The proposal aims to replace informal currency exchange channels that over 100,000 Bangladeshi expatriate workers currently use to send money home.
Why it matters
The initiative targets a 16.4 percent year-on-year decline in remittances by lowering transaction costs and bypassing local currency restrictions. By establishing direct banking links, Bangladesh aims to capture a larger share of the $38.05 million sent by workers in the first three months of the current fiscal year.
Bangladesh received $118 million in remittances from the Maldives in FY 2025-26, down 16.4 percent from $141.1 million in FY25. The current inflow reached $38.05 million in the first three months of the current fiscal year, serving a population of over 100,000 Bangladeshi workers.
The players
Bangladesh Bank
The central bank of Bangladesh responsible for managing monetary policy, national reserves, and foreign exchange regulations.
Maldives Monetary Authority
The central bank of the Maldives that oversees financial stability and regulates commercial banking operations in the country.
Md Mostaqur Rahman
The Governor of Bangladesh Bank who initiated the formal proposal to expand banking reach into the Maldives.
BRAC Bank
A commercial bank in Bangladesh that has performed feasibility studies for potential branch expansion in the Maldives.
National Bank
A private sector commercial bank in Bangladesh currently evaluating market entry feasibility in the Maldives.
The details
The proposal introduces three currency settlement models: Asian Clearing Union arrangements, rufiyaa-denominated travel payments, and bilateral currency swaps. These tools are intended to resolve the current reliance on informal markets for US dollar purchases, which creates high costs for workers. BRAC Bank and National Bank have already conducted feasibility studies to assess the potential for physical branch operations alongside existing regional peers from India, Sri Lanka, and Pakistan.
Timeline
2024: Data collection occurred regarding the foreign worker population in the Maldives.
FY 2025-26: Remittances from the Maldives totaled $118 million.
October 8, 2026: Bangladesh Bank Governor Md Mostaqur Rahman submitted the formal proposal to the Maldives Monetary Authority.
Market Landscape
The proposal to utilize Asian Clearing Union arrangements marks a strategic push to formalize remittance corridors that are currently dominated by informal brokers. This approach follows the established model of regional peers from India, Pakistan, and Sri Lanka that already operate formal branches.
Operators in the remittance and cross-border payment space should monitor the Maldives Monetary Authority for regulatory approval of these new settlement mechanisms. Firms should assess whether direct branch access creates competitive pressure on existing fee structures for international transfers.
The takeaway
This initiative underscores the strategic necessity of establishing physical financial infrastructure to secure volatile remittance flows. Financial institutions should track whether the proposed bilateral swap agreements succeed in reducing reliance on informal exchange channels.
Further reading
For broader trends in cross-border capital management, see our analysis on Financial Services.
Source note: This article includes information reported by Bangladeshpost.
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