Explanations sought from 13 banks for higher dollar rate
Bangladesh Bank (BB) has asked 13 banks' managing directors to explain why they are offering unusual US dollar rates in case of collecting remittances from foreign exchange houses.
The banks are: BRAC Bank, Islami Bank Bangladesh, Shahjalal Islami Bank, Jamuna Bank, Trust Bank, Rupali Bank, Eastern Bank, Janata Bank, United Commercial Bank, NCC Bank, Mercantile Bank, City Bank and Al-Arafah Islami Bank.
For all latest news, follow The Daily Star's Google News channel. In this regard, the banking regulator issued a letter on December 19 and asked the banks to reply within December 22.
Action will be taken if any bank fails to give a satisfactory explanation, officials of the central bank said.
Some banks claimed to have submitted their explanations to the Bangladesh Bank today.
However, Bangladesh Bank Executive Director and Spokesperson Husne Ara Shikha stated that she is unaware of any bank having submitted an explanation yet.
"We sent our explanation to the central bank today and will follow the regulatory instructions in case of purchasing US dollars from foreign exchange houses," Jamuna Bank Managing Director and CEO Mirza Elias Uddin Ahmed told The Daily Star.
There is pressure in the foreign exchange market as the flow of opening letters of credit (LCs) for commodities has increased ahead of Ramadan, he said.
He said the bank is not receiving sufficient foreign currency at the current official rate.
In some cases, foreign exchange houses are also responsible for the high US dollar rate, he said.
A senior official of BRAC Bank told The Daily Star that their bank also sent the explanation to the BB today.
The forex market has become unstable due to a lack of communication and coordination between the banks and the regulator, he said.
Some banks aggressively started offering high rates to collect foreign currencies, as the banking watchdog has recently instructed banks to clear their overdue LC payments, the BRAC Bank official said requesting anonymity.
City Bank's treasury department officials also informed this correspondent that they have also sent their explanation to the central bank.
The foreign exchange market became unstable this month after some banks began offering rates higher than the official one for the US dollar, another senior central bank official said.
When the official interbank exchange rate was around Tk 120 per US dollar, some banks were offering Tk 127 to Tk 128 to foreign exchange houses, he added.
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