Several treasury chiefs of private banks – who were fined Tk 1 lakh each last month over buying and selling USD at a rate higher than the market price – have appealed to the Bangladesh Bank seeking withdrawal of this penalty.
A senior central bank official, on condition of anonymity, confirmed the matter to The Business Post. A number of treasury chiefs who faced the fine also echoed the same on Wednesday, adding that they have sent separate letters to the Bangladesh Bank on the matter.
Insiders say though the treasury chiefs of ten banks were fined last September, not all of them have appealed to the regulator till the filing of this report. But they have plans to do so in the coming days.
Treasury chiefs 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 are facing the fine.
The senior central bank official said a decision on these appeal petitions will be taken at the next Bangladesh Bank board meeting.
Preferring not to be named, a private bank treasury chief said, “I have submitted an appeal under the rules of Bank Company Act Section 109. We had received three letters from the regulator seeking explanation on higher import rates.
“We had submitted a proper explanation.”
The central bank had sent letters – signed by its Additional Director Md Bayazid Sarker to the ten banks – to each of the ten banks. Later, Bayazid conducted a series of inspections on those banks and found evidence of irregularities.
“We have the right to appeal to the central bank. I hope we will be exempted from the fines,” said another treasury chief of a bank.
Last month, an inspection team from Bangladesh Bank’s Foreign Exchange Policy Department (FEPD) found that ten banks sold USD at higher rates, at a time when the forex market was already volatile.
The central bank then sent letters to the managing directors of these banks, asking them to explain why their treasury chiefs should not be penalised for their role in manipulating the USD exchange rate this year.
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.