BB threatens to cancel licences if banks fail to stop irregularitiesAKM Zamir Uddin
The Bangladesh Bank has warned the scheduled banks that it would take tough action against them if they fail to settle overdue inland and foreign bills in their authorised dealer branches.
The central bank’s warning came from a meeting titled ‘irregularities in AD branches’ between the BB officials and senior executives of the scheduled banks. The meeting was held at the central bank’s headquarters in the capital on Thursday. BB foreign exchange operation department general manager Md Shafiqul Islam presided over the meeting.
A BB official, who attended the meeting, told New Age on Thursday that the central bank had threatened to cancel licences of the AD branches if the scheduled banks fail to comply with the rules in this connection.
According to the BB data, some 8,000 inter-bank bills related to domestic and foreign trade transactions involving a sum of Tk 3,643 crore remained unsettled as of March 31, 2013.
The outstanding overdue bills were to the tune of Tk 3,880 crore in December, Tk 3,400 crore in January and Tk 3,700 crore in February, the BB data showed.
AD branches of the scheduled banks operate foreign exchange business and the banks have to take licences to open the branches.
The BB official said the overdue bills of the inland and the foreign bills in the banking sector in the last three months could not be stipulated as the central bank has introduced online system for monitoring the foreign exchange related business of the AD branches.
After March the banks have been submitting their bills of acceptance related data online, he said.
He, however, said that the overdue situation of the IDBP and the FDBP did not change much in the last three months.
The BB officials in the meeting said that it would debit fund from the accounts of the banks with the central bank in a bid to settle the overdue bills for the interest of their counterpart banks.
The banks have also not followed to pay overdue interest of the inland and the foreign bills violating the central bank’s rules and regulations, he said.
Besides, the BB emphasised on removing other irregularities in the AD branches. The irregularities include non-submission of reports about the local and foreign letters of credit related data by AD branches in due time to the central bank.
Another BB official said that some banks were opening new LCs against businessmen whose bills of entry were still overdue.
The overdue in bill of entry means that the imported products of an importer were yet to reach in the country despite settling the payment against the exporters, he said.
As per guideline of the BB, a bank is not allowed to open new LCs against an importer if his or her bills of entry are turned into overdue, he said.
But the AD branches hide the overdue of the bills of entry and open new LCs against some importers, he said.
Some AD branches are not taking post facto approval for their forced loan from the central bank although the BB makes mandatory to take such type of approval to create the loan, he said.
The AD branches are not following the rules and regulations accurately to send outward remittance on behalf of the foreign business organisations like shipping and airlines companies, he said.
The AD branches will have to take post facto approval of the outward remittance of foreign companies within three months, he said.
The BB informed the banks in the meeting that it had started work to monitor the international credit and debit card.
The BB asked the banks to avoid irregularities when it issued credit and debit card, he said.
The BB also gave directions to the banks to send the information about their issued international credit and debit cards.
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