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