The central bank circular issued on August 1 this year asked the moneychangers to submit a return of minimum $5 lakh to renew their licence from August next year.

Officials at the Foreign Exchange Policy Department of BB think the new ceiling would increase revenue and help the real moneychangers carry on their business but the moneychangers fear it would be a big blow to their business.

Some moneychangers said they are struggling to achieve a turnover of $2.5 lakh a year, a ceiling set by BB in 1999, two years after opening up the sector. BB officials however believe most of them are doing transactions of more than $5 lakh a year.

"So this would not be a problem for the moneychangers. The policy would help them compete with those who are involved in illegal hundi business," said a high official at the Foreign Exchange Policy Department.

According to BB statistics, transactions of 375 moneychangers totalled $7.92 crore during January-November period of 2003. The figure based on the return submitted by the moneychangers shows an average of $2.11 lakh per firm.

BB high officials said people are increasingly showing interest in private money-changing firms as the central bank does not control the exchange rate and they can buy and sell foreign currencies at a competitive rate.

Moneychangers can endorse up to $1,000 per year for each passport out of $3,000, allowed for a trip to countries outside the Saarc region. For Saarc countries, a traveller can endorse $1,000 for air and $500 for land routes.

One moneychanger complained such a limit creates low transactions in private money changing firms. "We can only endorse the first 1,000 dollar, and if someone endorses $1,000 from bank we cannot endorse any more, " said a moneychanger in Gulshan.

A BB high official however denied the allegation saying, "A moneychanger can sell up to $1,000 per passport and this is not subject to first one thousand dollar."

The government collects 15 percent value-added tax from the yearly return of the moneychangers and the new ceiling of return would increase revenue from money exchange sector, central bank officials said.

According to a BB source, a total of 635 moneychangers including 340 in Dhaka were granted licence in 1997. After imposition of the ceiling of $ 2.5 lakh turnover in 1999, nearly 50 percent of the moneychangers almost closed their business.

The moneychangers believe the raised ceiling on return would further cut the number of moneychangers in operation.

BB officials said the government has legalised the money changing business in private sector for the benefit of people as they can operate 24 hours a day, seven days a week while the banks only serve them during transaction hours.