Inside Economy

Dollar manipulation of banks; Deep conspiracy, needs exemplary punishment

Publish: 08:00 AM, 12 Aug, 2022


Six banks in Bangladesh are squandering with dollars crisis. These banks have been found guilty in the investigation of Bangladesh Bank and for this, the heads of the treasury department of these banks have been removed from their duties. Bangladesh Bank said, this measure has been taken in response to their unacceptable approach to make extra profit by destabilizing the US dollar market. These banks are are Standard Chartered Bank, BRAC Bank, City Bank, Prime Bank, Dutch Bangla Bank and Southeast Bank. At least five of these banks have had various complaints against them in the past, including money laundering. But all those complaints were ignored. The investigation stopped midway for reasons unknown. Banking experts say that punishing only the treasury chiefs is not enough, but strict and exemplary action must be taken against these banks. Because the fraud has happened from the top-level officials of the bank. For this reason, from the board of directors of the bank to its managing director, everyone should be brought under scrutiny and exemplary punishment should be given if anyone found guilty.

The dollar market in Bangladesh has become destabilized since quite a few days. The price of the dollar has risen sharply due to the scarcity of dollars in the open market. The price of one dollar was equivalent to Tk 119 in the open market on Wednesday. Bangladesh Bank is being repeatedly forced to adjust the value of the dollar with the taka and this has reached an alarming level. Findings show that the dollar market has become volatile due to the manipulation of a few banks. It is not only done from the point of view of business profit but there is also a deep anti-national conspiracy behind it. These 6 banks are involved in implementing a blue plan to endanger the government and destroy the country's economy.

Standard Chartered Bank (SCB) has a list of long-standing complaints against it among other banks. Former foreign minister BNP leader Morshed Khan’s son-in law used to work here before. It was alleged that this bank had a role in money laundering during this tenure. Morshed Khan's son-in-law was accused of money laundering and was also quizzed by the Anti-Corruption Commission (ACC). He admitted to the allegations of laundering. He also informed that a large amount of money was smuggled abroad through this bank. But then there was no further progress on it as the matter was covered up. There are many such complaints against this bank. These allegations were never investigated. A Bangladesh Bank official said on condition of anonymity that since it is multinational bank, the apex bank is always flexible with them.

The second bank involved in dollar manipulation is Prime Bank. Azam J Chowdhury is one of the owners of Prime Bank. Currently his son is serving as the chairman of this bank. Azam J Chowdhury filed a false defamation case against Awami League President Prime Minister Sheikh Hasina during One-Eleven in 2007. The Awami League president had to be imprisoned and had to spend almost 11 months in prison. But the Awami League government has not taken any action against Azam J Chowdhury despite being in power for 13 years. On the contrary, he expanded his amount of wealth. There are various allegations against Azam J Chowdhury including money laundering. Although there have been specific allegations, particularly through over-invoicing, those investigation has not progressed much.

BRAC Bank was established with financing of poor people. It was established when the amount of micro-loans scheme that BRAC ran were inflated. It was said that the bank was established to bring the poor and marginalized people into under the mainstream economy. But gradually it became an elite bank. Small borrowers and poor people cannot even go to the balcony of this bank. Several investigations have revealed that BRAC Bank is used as one of the medium to keep money of rich people and to launder it abroad. When BRAC Bank was established, a writ petition was filed challenging the validity of this bank by renowned economist Dr. Mozaffar Ahmed. But the writ did not last due to legal complications. It is said that the huge empire that BRAC Bank has made with the micro-loan schemes from poor people, has now become one of the institutions of financial irregularities. Various people have become victims of frauds in this bank and they have not been properly remedied. According to Bangladesh Bank's report, 48 customer fraud complaints were received against the bank from 2010 to 2020. But none of these were investigated. 'BRAC Bank' is an institution controlled by BRAC. The current chairperson of BRAC is Hossain Zillur Rahman who was one of the main masterminds of One-Eleven. He had close ties with Dr Muhammad Yunus an he took charge as an advisor to the unelected government in 2007 with Dr Yunus’s recommendation.

City Bank also has various long-standing complaints including money laundering against it. Pertex Group holds almost the entire board of directors of this bank. There are multiple allegations against Pertex Group. The founder of Pertex was a MP for the opposition party BNP and and is also one of their financiers. After his death, his children are also in close contact with BNP. Many people feel that it is necessary to look into whether there is any political connection with the activities of City Bank in recent times. Earlier, there was a complaint of sexual harassment against a senior official of City Bank. But the law enforcement agencies have maintained a kind of silence on the allegations for reasons unknown. The managing director of this bank is known to be close to the civil society.

Although the central bank has several complaints of money laundering through over invoicing against Dutch Bangla Bank, the investigation of all those complaints has not further progressed or came to any conclusion. Why it did not progress is also a big question. From 2011 to 2016, there were five allegations of money laundering against this bank, but Bangladesh Bank showed no interest in investigating it.

A recent investigation by Bangladesh Bank showed that these banks were buying more dollars than the demand and selling those dollars at a higher price. The dollar was sold at a price Tk 25 higher than the price at which it was bought. When the inspection team of Bangladesh Bank went to these banks, they found that they had bought and collected more dollars than what they needed. That means, these 6 banks have a direct role behind creating a dollar crisis in the market which triggered an inflation. Due to this, the price of fuel has increased and there has been a kind of discontent among the people. Therefore, economic experts feel that these 6 banks were involved in such nefarious activities to destroy the country's economy in a planned manner and such misdeeds cannot be done by only a senior officer of the bank or the head of the treasury. Top officials starting from Board of directors and managing directors are involved in this.

A banking expert said that such incidents cannot happen without the consent of the top officials. Therefore, these banks have worked systematically to create an artificial crisis of dollars in the market to damage the economy, increase the prices of goods and endanger the government. The authorities concerned think that action should be taken against these banks not only under banking law, but also under criminal law. The owners and management board of these banks should be arrested immediately and given exemplary punishment. Otherwise, such incidents will continue to happen. If action is not taken against these 6 banks, then other banks will also join in these conspiracies in the future. It will be more difficult to handle the economic pressure then.

Dollar   bank   conspiracy   punishment  


Inside Economy

Remittance sinks to 7-month low

Publish: 09:10 PM, 02 Oct, 2022


The remittance inflow sinks to lowest in seven months. The inflow of remittance dropped around 25% in September to $1.54 billion compared to August earnings. 

Bangladesh received $2.04 billion in remittances in August, according to central bank data published Sunday (2 October).

The total remittance inflow in the current financial year is $5.67 billion, which was $5.41 billion during the same period last year.

According to experts, the cost of living for expatriates increased due to global inflation. Additionally, they are preferring hundi over legal remittance channels as they are getting Tk5-6 per dollar more than the bank exchange rate.

They had expressed concern that the Hundi channel may become more active. 

Remittances dropped to a seven-month low in September as the central bank fixed the dollar exchange rate for inward remittance. Bangladesh received a lower remittance of $1.49 billion last February.

Bankers said the downfall happened after, on the advice of the central bank on 12 September, the banks fixed the dollar exchange rate for remittances at Tk108.

However, bankers had initially feared that remittances may decrease due to fixing the exchange rate. The exchange houses said that the remittances came in less in the first week after the rate was fixed as remitters could not be given higher rates. 

A visit to the website of several exchange houses including Moneygram and Western Union shows that they are paying Tk106-107 per dollar for remittance inflow. However, the houses also charge $1-2 as transfer fee. 

As a result, those who send remittances in small amounts do not get an average rate of more than Tk104-105 a dollar. 

At present remittance through Hundi yields Tk113-114 per dollar. Due to fixed exchange rate at banks, the difference between dollar price of Hundi and the banking channel is at least Tk6-7. 

Remittance   Bangladesh  


Inside Economy

Exports decline in September: EPB

Publish: 06:39 PM, 02 Oct, 2022


Overall exports declined by 7.52% in September this year compared to the same period in 2021 after 13 months of recovery from COVID pandemic, according to the latest official figures.

But exports of readymade garments reached 10.27 billion dollars in the first quarter of FY2022-23, which is 13.41% higher than previous year’s corresponding time, according to data released by the Export Promotion Bureau (EPB) for July-September.

Knitwear exports, however, declined by 9%, while woven declined by 5.66%, it said.

BGMEA Director Md. Mohiuddin Rubel said on Sunday that BGMEA had already shared early indication of growth slowdown from September onwards, which is apparently reflected in export data for September. 

The global retail market is disrupted by many challenges starting from post covid container freight and supply chain crisis, price hike of raw materials, and then anticipated recession in the global economy, which is halting retail sales and demand for clothing, he said. 

Rubel said buyers were following cautious steps to make their inventory and supply chain optimum, so some of them are even holding back production and orders. 

“Altogether it has been quite a fluid and vulnerable situation, where we have all the strengths and possibilities to grow given our sustainability and competitiveness strides, yet the global economic outlook makes it difficult to foresee something bright for the final quarter of the year 2022,” he added.


Bangladesh   Export  


Inside Economy

Surprising remittance flow in September too

Publish: 02:25 PM, 19 Sep, 2022


Remittance inflow giving hope to the strained economy. In continuation of the last two months, this month's remittance flow is also surprising. In the first 15 days of this month, expatriate income or remittances have reached 1008.67 million dollars. If the current trend continues, the amount of expatriate income will exceed 200 million dollars at the end of the month.
This figure was found in a report of the Statistics Department of the Central Bank.

In the first 15 days of September, remittances through five state-owned commercial banks reached 140.5 million US dollars. Remittances through private banks reached 848.3 million US dollars. 3.4 million US dollars came through foreign banks and 16.4 million US dollars came through a specialized bank.

In recent times the largest number of remittances came through Islamic bank. Expatriates sent 220 million dollars through this bank. After that, 99.7 million dollars came through City Bank, 73 million dollars through Al-Arafah Islami Bank, 62.3 million dollars through Agrani Bank and 52.1 million dollars through Dutch-Bangla Bank and 55.8 million dollars came through Pubali Bank.
Meanwhile, the benefits of various concessions and discounts to increase the flow of remittances are already being seen. Expatriates have sent remittances of more than 2 billion dollars in legal channels for two consecutive months of the current financial year. Remittances of 203 crore 78 lakh (2.03 billion) dollars have arrived in the last month (August). In the month of July remittance of 209 crore 63 lakhs came to the country. A large amount of expatriate income came to the country due to Eid-ul-Azha in July.


Inside Economy

Export Development Fund loans can be repaid in instalments from now on

Publish: 03:06 PM, 15 Sep, 2022


Bangladesh Bank has introduced an instalment facility to repay loans from the Export Development Fund (EDF).

From now on, the entire loan liability can be paid in three instalments, which had to be paid at once earlier.

The Foreign Exchange Policy Department (FEPD) of Bangladesh Bank issued a guideline in this regard today (September 15, 2022) and sent it to all authorized dealers engaged in foreign exchange transactions.

According to the Bangladesh Bank directive, exporters can partially repay the EDF loan liability. A maximum of two partial repayments can be made during the loan tenure.

The circular stated that the remaining liability is to be repaid in one go during the loan tenure. That means exporters can pay the entire debt in three instalments.

Sector insiders say that exporters had to face issues with the repayment at once, as export income is not available at the same time.

In such a situation, the exporters will be able to partially pay the EDF liability in instalments only after receiving the export proceeds under the new directive.

The central bank provides foreign currency support to exporters for the import of manufacturing raw materials, under EDF. The tenure of an EDF loan is 180 days. Subject to the approval of Bangladesh Bank, this period can be extended by another 90 days.



Inside Economy

Default bank loans surge to record 1.25 trillion

Publish: 05:08 PM, 09 Sep, 2022


The amount of defaulted bank loans in the country increased by about 9.0 per cent to a record Tk 1.25 trillion amid the adverse impact of the Covid-19 pandemic until June this year.

According to the Bangladesh Bank’s June quarter report, banks' loan disbursement stood at Tk 13.98 trillion till June 2022, of which 8.96 per cent or Tk 1.25 trillion turned into bad loans, reports UNB.

Despite the loan moratorium and reducing the number of annual instalments, the volume of defaulted loans has reached a record high in the country so far, said the report.

Three months ago, in the March quarter of 2022, the defaulted loans totalled Tk 1.13 trillion, according to the report.

Accordingly, in the second quarter of the year (April-June), the amount of loans that remained unpaid in time in the banking sector increased by Tk 0.11 trillion.

In the first quarter (January-March) there was an increase of defaulted repayment by Tk 0.10 trillion to Tk 1.13 trillion.

Noted economist, Dr. A B Mirza Azizul Islam said, “If you want to reduce defaulted loans, you have to increase debt collection. At the same time, bulk moratorium and reduced number instalment facility should be stopped for the borrowers.”

He explained why. “Because, having been able to get concessions for several years, the defaulters now think that if I don't repay the loan, I will get more concessions in the future. So, the facility of the defaulters should be stopped.”

Former Bangladesh Bank governor Dr. Salehuddin Ahmed echoed Island.

He said that the loan collection should be focused on the legal procedure as the banks lend money to small depositors. Without legal action, the depositors' benefit would not be secured.

In reply to a query about the capital shortfall of different banks, he said that the more defaulted loans increase, the more security provision should be kept at the central bank.

Banks have run into capital shortages while keeping this extra money out, he said.

The central bank’s latest report found that the capital deficit of seven state-owned banks, including two of the specialized banks, was Tk 0.26 trillion at the end of June.

Out of this, Bangladesh Krishi Bank has the highest deficit of Tk 0.13 trillion. The second highest deficit of Tk 25.07 billion at the Agrani Bank, Tk 22.78 billion in Sonali Bank, Tk 22.61 billion in Rupali Bank, Tk 21.24 billion in Basic Bank, Tk 16.03 billion in Janata Bank, and Tk 21.49 billion in Rajshahi Agricultural Development Bank.

The capital shortfall of five private sector banks is Tk 34.37 billion. Among them, the deficit of the ICB Islamic Bank is Tk 16.59 billion, Tk 12.12 billion at Bangladesh Commerce Bank, Tk 3.0 billion at National Bank, Tk 2.63 billion at Padma Bank, and Tk 230 million at Bengal Commercial Bank. 

At the end of June 2022, the total capital deficit of 12 banks stood at Tk 0.29 trillion in the banking system, said the report.

Economy   Bangladesh   Bank Loan   Central Bank   BB