BB fines treasury heads of 10 banks

Bangladesh Bank (BB) has fined the treasury heads of 10 banks for allegedly selling US dollars at higher rates to importers.

A senior central bank official, on condition of anonymity, confirmed the development to The Business Post on Sunday.

The treasury heads of Mercantile Bank, Brac Bank, Premier Bank, Modhumoti Bank, Exim Bank, Social Islami Bank, Midland Bank, Al-Arafah Islami Bank, Shahjalal Islami Bank and Trust Bank will face the fine.

The central bank has imposed a fine of Tk 1 lakh on each of these treasury heads as per bank company law, said a senior official of BB’s Department of Foreign Exchange and Policy (FEPD).

Last month, an inspection team from FEPD found that 10 banks sold USD at higher rates, which was volatile in the forex market as well.

The central bank then sent a letter to the managing directors of these banks, asking them to explain why their treasury heads should not be penalised for their role in manipulating the USD exchange rate this year.

Among the 10 banks involved in dollar trading, seven are conventional ones and three are Islamic ones.

According to Section 109 (7) of the Bank Company Act 1991, such an offence is punishable with a minimum fine of Tk 20,000 and a maximum of Tk 2 lakh. If the contravention of the same section of the act continues, an additional fine of Tk 1,000 can be imposed for every day after the first day. 

Though the Bangladesh Foreign Exchange Dealers' Association and the Association of Bankers, Bangladesh set the USD rate for remittances and exports every month, the central bank also warned that every bank has to follow this instruction or will be penalised accordingly.

However, as several banks are not following the instructions, the forex market has remained volatile.