Rejaul Karim Byron

A number of banks on several occasions had accepted foreign and local bills against letters of credit, but did not pay the dues of other banks in time. The amount of such unpaid bills stood at $363 million or Tk 2,976 crore as of June 30.

And a portion of this amount remained unpaid due to complaints of false documentation and faulty accepted bills against local and foreign LCs.

Dishonest businesses provide these false documents to banks to siphon money from the banks without any real transaction.

The central bank got the scenario on the basis of information collected from the banks.

The Bangladesh Bank has directed the commercial banks to pay their overdue accepted bills against local and foreign LCs within 15 days.

The directive was given to all banks, except Sonali Bank, at a meeting chaired by BB Governor Atiur Rahman yesterday.

The meeting discussed the interest rate, classified loans and the banks' reluctance to pay the accepted bills.

About 40 banks' unpaid amount against accepted bills stood at around $363 million in 7,260 accepted bills, as of June 30, 2012.

Of the amount, $319 million was against 6,746 local bills and $43 million against 514 foreign bills.

After the meeting, BB Deputy Governor SK Sur Chowdhury told journalists that the banks were asked to pay the unpaid bills within 15 days.

If any bank fails to do so, the creditor will go to Bangladesh Foreign Exchange Dealers' Association (Bafeda) for a settlement, and the association will take steps in line with its rules.

Chowdhury also said, if Bafeda fails to settle it, the central bank will deduct the money from the account of the debtor bank and will deposit the amount in the account of the creditor bank.

The meeting decided that the banks who have accepted such bills will have to pay the money to the creditor banks now.

BB officials told the meeting that different banks complained of non-payment of such bills.

The recent Hall-Mark scam was detected by looking into such complaints, the officials said at the meeting.

On different occasions earlier, banks, despite accepting foreign and local bills against LCs, did not pay the dues of other banks on time.

After complaints from several banks, the central bank deducted money from the debtor bank and paid the amount to the creditor bank.

The amount of such overdue bills has been on the rise in recent times, the BB officials said.

According to central bank statistics, on June 30, 2009 the number of such unpaid bills was 2,789, and against the bills the amount was $88 million.

The number of bills stood at 8,557 in March and the overdue amount was $944 million.

In the last few months this type of overdue amount was brought down to one third, said a BB official.

The central bank told the meeting that serious irregularities are taking place in the banking sector through inland bill purchase (IBP), and acceptance in local and foreign bills against LCs.

To detect the irregularities, the BB has formed 40 teams and they are investigating the complaints. If any irregularity is detected, action will be taken against the concerned bank, the official said.

News: The Daily Star/Bangladesh/15-Sep-12