Governor asks bankers to stop money laundering

Emphasising the need for banks to take stronger measures against under-invoicing, Bangladesh Bank Government Abdur Rouf Talukder has asked the heads of all banks to proactively prevent such practices. He made the call during a meeting with managing directors of banks, convened by the central bank on Wednesday.

In the meeting, the governor said banks must halt money laundering facilitated through under-invoicing. The issue of under-invoicing took the centre stage during the meeting, which also addressed a dozen other key matters on its agenda.

During the meeting, the central bank officials discussed the outcome of their investigation into 13 banks that had been found to charge rates exceeding the fixed norms on import bills. The governor communicated the necessity of rectifying this practice, warning banks against charging rates higher than the fixed rate.

The central bank boss also highlighted reduction of trade deficit in the month of June. The most recent balance of payment report indicated a decrease in trade deficit, attributed to the rise in exports from Bangladesh.

While acknowledging the positive impact of the declining trade deficit on the economy, concerns were raised at the meeting about the continuous decrease in the financial account.

The meeting also featured discussions on the issue of non-performing loans (NPL). Bankers shared the consensus that resolving this challenge would require concerted and sustained efforts, acknowledging the governor's commitment to addressing the rising NPL issue within the banking sector.

Following the meeting, Selim RF Hussain, the chairman of the Association of Bankers’ Bangladesh (ABB) and Managing Director of Brac Bank, told journalists that the banking sector was grappling with a liquidity crisis due to dollar selling by the central bank. He clarified that although some banks were facing liquidity challenges, it could not yet be deemed a sector-wide crisis, emphasising that borrowers could still access credit from the banks.

Bangladesh Bank Spokesperson Mezbaul Haque informed journalists that certain banks were inflating their import bills by more than Tk 109, a clear violation of the rules and regulations set forth by ABB and BAFEDA. Such actions were causing disruptions in the import bill process, he added.

Haque also underscored the growing concern of stressed assets in the banking sector. The central bank has instructed the banks so that their monitoring teams rigorously assess these situations when rescheduling default loans.