Bangladesh Bank on Tuesday slapped financial penalty amounting to Tk 50,000 on Janata Bank due to its failure in settling foreign bills against letters of credit in due time.
To this end, the BB issued a letter to managing director and chief executive officer of Janata Bank asking him to pay the fine by next 14 days. Otherwise, the central bank will deduct the money from the bank’s current account with the central bank, said the letter.
The BB letter said the central bank had served a show-cause notice on Janata Bank on April 7 to explain why it failed to settle the foreign bills in due time against LCs.
The central bank had also served the show-cause notice to another 21 banks on the day due to their failure in settling the foreign bills. The BB later issued same show-cause letter against more seven banks.
Janata Bank has recently replied to the BB’s show-cause notice but it could not satisfy the central bank.
The central bank asked Janata Bank to settle the overdue acceptance bills in the quickest possible time; otherwise, it would take more punitive measure against the bank.
A BB official told New Age on Tuesday that Janata Bank had also a huge number of overdue inland bills for local LCs along with foreign bills.
‘The central bank has already asked the bank to settle the pending local bills. The BB will take same punitive measure against the bank if it keeps overdue in local bills’, he said.
The official said the BB was now thinking to take tough action against other banks which had faced central bank’s show-cause notice.
Due to the overdue acceptance bills in foreign LCs, the country is now bearing extra cost in LC confirmation charges, another BB official said.
The LC confirmation charge is imposed when an exporter’s (foreign party) bank wants security in receiving payments under the LC.
The central bank had issued a circular to managing directors of scheduled bank on March 12 in this regard.
The BB had warned in the circular that it would impose fine against the banks if they failed to settle their inland and foreign bills of LCs timely.
According to the circular, the country’s banking sector has been facing an image crisis as some banks are not settling their acceptance bills for foreign LCs in due time.
The banks concerned are now counting excess interest rate and are not settling the acceptance bills in due time, the circular had said.
Against the backdrop, the cost of import is now on an upward trend and it would put an adverse impact on the commodity price, the BB said.