The central bank Wednesday dismissed the involvement in HSBC bank scandal of terrorism financing and money laundering by two local banks saying that “It was an old issue as instantly the authority concerned took regulatory actions at that time.”

“It was an old issue as it took places between 2005 and 2007. Bangladesh Bank (BB) already enforced regulatory actions in this regard,” said Deputy Governor SK Sur Chowdhury.

Chowdhury was replying to queries from reporters on involvement of the banks in money laundering activities jointly with the HSBC bank.

SK Sur Chowdhury attended a function organised by the central bank at its office to announce the new monetary policy for July-December period of the financial year (FY) 2012-13.

A US Senate Permanent Subcommittee on Investigations report suspected the two banks to have involvement in transacting funds for terrorist organisations, which got media coverage since Monday last.

The report is the result of an investigation on London-based HSBC Holdings PLC by the US subcommittee.

Chowdhury said the central bank keeps constant eyes on day-to-day banking activities in the entire banking sector in order to check illegal acts.

He said there is no such allegation against Bangladesh’s banking sector right now as we are very-much watchful on banks’ daily transactions.

“However, we are examining the US senate report and we will take actions if there is any current issue,” he said.

The BB high official said the central bank has reconstituted the Bangladesh Financial Intelligence Unit (BFIU) and posted highly skilled manpower in the department to carry out investigations in banks on money laundering and terror financing, if there is any.

“Our BFIU is now of global standards and the law is stringent than the previous one,” he said.

Governor Dr Atiur Rahman supplemented by saying that the US senate report has already mentioned that the regulatory actions against two local banks were taken that time.

“However, we would intervene if necessary,” Dr Rahman said.

He said the banking sector of the country was saved from the impact of global economic meltdown only because of rightful initiatives of the central bank.

The BB authority lays due emphasis on financial intelligence, he added.

He said the capacity of BFIU was strengthened over the past few years. “We will install latest software for use of BFIU soon,” he added.

Meanwhile, commenting on the issue, IBBL managing director Mohammad Abdul Mannan said that his bank has no link with money laundering or terrorism financing.

“There is no correlation between IBBL and HSBC regarding any such transaction, as it was mentioned by different media,” Mannan told daily sun.

He said the things the senate report identified was the sponsorship of Al Raji Foundation to IBBL. “I would say the sponsorship was given to them (Al Raji Foundation) after fulfilling the regulatory requirements and Bangladesh Bank and the Securities and Exchange Commission knew it,” he said.

The Daily Sun/Bangladesh/ 19th July 2012

Steve Ball

Steve Ball has recently been appointed as the chief financial officer of HSBC, Bangladesh, according to a statement of the bank yesterday.

Since joining the HSBC Group in 2007, Ball worked in group management reporting, covering North America, before being selected for the group's International Finance Manager programme.

A UK-qualified professional accountant, he also holds a bachelor degree in modern Chinese studies.

Commenting on Ball's appointment, HSBC Bangladesh CEO Andrew Tilke said: "It is a privilege for us to have someone of Steve's calibre and experience in the bank's leadership team in Bangladesh.

"I am confident that, with his broad range of global financial experience, Steve will contribute significantly in the HSBC's endeavour to grow and excel as the leading international bank."

Steve Ball replaces Nayeem R Choudhury who joined HSBC Group's IFM programme and moved to HSBC Oman as chief financial officer.

The Daily Star/Bangladesh/ 19th July 2012

The central bank has fixed office hours for all banks from 9:30am to 4pm for the month of Ramadan.

Transaction hours will be between 9:30am and 2:30pm with a prayer break from 1:15pm to 1:30pm, Bangladesh Bank said in a statement yesterday. Banking services will remain off on Friday and Saturday.

Earlier, the government set office hours for all its offices from 9am to 3:30pm with the same break for prayers.

The Daily Star/Bangladesh/ 19th July 2012

Bangladesh Bank aims to control credit flow to public and private sectors in such a manner that can both meet the government's GDP growth target and lower inflation.

“The monetary policy stance ensures that attaining the GDP growth target is not constrained by access to credit for productive purposes," BB Governor Atiur Rahman said yesterday.

The BB also wants to limit domestic credit growth to levels consistent with the inflation target in the current fiscal year,” Rahman said while announcing the monetary policy for July-December, at the central bank headquarters in Dhaka.

In the current fiscal year, the GDP (gross domestic product) growth target has been set at 7.2 percent and inflation at 7.5 percent on an average basis.

The target of the private sector credit growth to be achieved by December has been raised by 2.3 percentage points over the previous year's target and set at 18.3 percent.

In the previous monetary policy, a target was set to bring down private sector credit growth to 16 percent by June, but the central bank has estimated that it may be 18.5 percent during the period.

However, the public sector credit growth has been lowered by 17.5 percentage points and set at 13.5 percent by December.

In the previous monetary policy, a target was set to contain public sector credit growth at 31 percent by June, but the BB estimated that it may be 23.4 percent during the period.

In the new monetary policy, the target for the private sector credit growth by June next year has been set at 18 percent and for the public sector at 20.8 percent.

The BB governor said credit to the private sector is envisaged to remain at a healthy 18 percent, above that in other countries in the region, and enough to accommodate the GDP growth target for the current fiscal year.

This stance is being closely coordinated with the finance ministry, he said.

Ensuring that the government's borrowing from the banking system does not crowd out available liquidity for commercial banks will remain a key area of focus for the BB, the governor said.

Hassan Zaman, senior adviser to the BB governor, said the government's target for borrowing from the banking sector at Tk 23,000 crore for the current fiscal year has been included in the monetary programme.

But the growth in such borrowing this fiscal year is lower than that in the last fiscal year, he said.

The BB will also take steps to ease the liquidity pressure on a few primary dealer banks that are required to absorb government's securities, he added.

Allah Malik Kazemi, a senior consultant of the BB, said, whether the GDP growth target for the current fiscal year will be achieved depends on the world economy.

Kazemi said, given the ongoing global economic slowdown, there are significant downside risks for Bangladesh's export and remittance growth, and therefore for the GDP growth target.

“To overcome the risks, steps as far as possible have been incorporated in the monetary policy,” he said.

However, the BB governor said, due to different reasons including the Summer Olympic Games in the UK, orders for Bangladeshi garments have been on the rise. He said exports in the current fiscal year would be good.

In order to strengthen the financial system, new loan classification and provisioning guidelines are in place, Rahman said.

Banks will have to implement these within the period of the current monetary policy, and while these may make a one-off difference to bank profitability, they will not affect access to credit, the BB governor said.

Citing a study of the central bank, its Deputy Governor SK Sur Chowdhury said default loans in banks may rise slightly in the September quarter.

But in December, it will get adjusted, he added. "As a result, there will be no impact on banks' profitability."

Chowdhury said, if the banks follow the new loan rules properly, good borrowers will get more loans.

The Daily Star/Bangladesh/ 19th July 2012

Asoke Das Gupta, Vice Chairman, Shawket Jaman, Director of Board of Directors, Farman R Chowdhury, Managing Director, seen at the 13th founding anniversary of the Bank in Dhaka.

ONE Bank Limited celebrated its 13th founding anniversary at the Bank’s head office recently.

Asoke Das Gupta, Vice Chairman, Shawket Jaman, Director of Board of Directors, Farman R Chowdhury, Managing Director and other senior executives of the Bank were also present.

ONE Bank started its functioning in 1999 as a private sector commercial bank.

The Daily Sun/Bangladesh/ 18th July 2012