State-run banks charging more than private ones

Bangladesh’s state-run banks are charging a higher USD rate for LC settlements compared to private commercial banks, putting even more pressure on importers.

On Wednesday, state-run Sonali, Rupali, Janata and Agrani banks charged importers Tk 107.45, Tk 107.50, Tk 106.15 and Tk 105.40 per USD respectively for settling imports. Before the Bangladesh Bank allowed a floating exchange rate, these banks were charging below Tk 100.

However, private commercial Eastern Bank, BRAC Bank, Dhaka Bank, and Bank Asia charged the importers Tk 103, Tk 105.75, Tk 105.78, and Tk 105 per USD respectively for the same purpose on the same day.

The Bangladesh Foreign Exchange Dealers’ Association (BAFEDA) on September 11 set the highest rate for remittance collection at Tk 108 per USD and Tk 99 for export encashment after a meeting with the Association of Bankers, Bangladesh (ABB).

As per the decision of the two organisations, the banks’ average cost to collect the greenback is now around Tk 103.50 per USD.  They were allowed to charge additional Tk 1 with the cost, but most of the banks are now charging higher rates, said importers.

A senior official of a Chattogram-based industrial group said, “State-run banks are charging more than the private banks for LC settlement, which is causing significant difficulties for importers.”

Zahid Hussain, former lead economist of World Bank Dhaka office, said, “Multiple USD exchange rates in import, export and remittance will increase the importers’ suffering, and the move could cause the price of essential commodities to go up further in the coming days.”

A senior official of the treasury department of Sonali Bank said, “We were charging below Tk 100 per USD to importers before the floating exchange rate was allowed. This had caused the bank huge losses in USD trading.

“This bank has now increased its USD rate for LC settlements based on the market conditions.”

Dhaka Bank Managing Director Emranul Huq said, “The USD rates are variable for import settlements, and this figure will now vary from bank to bank. Banks that have little to no export earnings will have a higher USD rate.”

On Wednesday, most of the banks traded the greenback at an inter-bank transaction rate of Tk 103 to Tk 107 per USD.  As a result, this rate stood at Tk 105 per USD, which was at Tk 103.91 per USD on Monday.