Bangladesh Bank warns nine lenders on rigged dollar sale

Nine banks face penalties for selling dollars to importers at higher prices.

Bangladesh Bank warned Dutch-Bangla Bank, Dhaka Bank, Trust Bank, BASIC Bank, Mutual Trust Bank, City Bank, Prime Bank, NCC Bank and Exim Bank.

The central bank said those banks have reported less than what they have charged importers for dollars. Regulators now seek explanations on why they would not be penalised for giving false information by hiding the actual data.

The banks face a three-day deadline to respond to the notice issued on Sunday. If a bank fails to respond properly, it will be fined under the existing law.

“These banks have charged importers one taka more than the interbank rate,” Bangladesh Bank spokesman Serajul Islam told bdnews24.com.

“The banks have taken advantage of the high demand for dollars in the market, which is an evil practice. The rates at which the banks have sold the dollars to the importers have been concealed from the central bank.”

In line with the instructions, banks are supposed to sell one dollar at Tk 83.85 at the import level. These nine banks have flouted the instructions by selling dollars to importers at rates ranging from Tk 84.6 to Tk 84.95.

Islam said the notice was based on “clear evidence” found by a central bank team.

Central bank officials said the demand for dollars rose as imports surpassed exports and inward remittances. The banks driven by the greed for profit cashed in on the high demand for the greenback. Many banks opened the letters of credit for importers, going beyond their capacity.

In November last year, Bangladesh Bank served notice on 20 banks, citing the same complaints. Some banks were fined because they failed to provide clear answers.

Meanwhile, Bangladesh Bank has continued to sell dollars to various banks as demand for the greenback rose.

The central bank has injected $2.31 billion into the market so far in the current fiscal year.

The central bank sells dollars to the banks to keep the market stable after the demand for the US currency increases. When the supply increases, it buys back the currency from the market.