British banking giant HSBC initiated a process to close a bank account of Islami Bank Bangladesh by the end of this month following a US subcommittee report.

US Senate's Permanent Subcommittee on Investigations, a congressional watchdog panel, in the report asked HSBC to cancel banking relations with institutions having owners with terror financing links.

Islami Bank came into the spotlight recently for its alleged links to terror financing after the US Senate report exposed HSBC's internal governance failure to control flows of suspect funds. Islami Bank denied the allegations of terror financing.

“We got a letter from HSBC last month for closing one of our accounts,” MA Mannan, managing director of Islami Bank, told The Daily Star by phone. The letter was issued last month.

The closure of the account with HSBC would not affect Islami Bank as the bank has more than 200 corresponding relations with other banks, he said.

“HSBC accounts for only 1 percent of our total foreign transactions,” Mannan said. So, the account closure would not affect its foreign transactions, he said.

“We have three accounts with HSBC and we have requested HSBC to close two other accounts,” said Mannan. Islami bank has accounts with HSBC in the USA, Mumbai and Karachi.

Mannan said many foreign banks had wanted to know about the Islami Bank's stance on the US report. "They were pleased with our clarification."

“Many foreign banks also went to Bangladesh Bank to know the regulator's opinion about the issue and they are now pleased,” Mannan said.

News: The Daily Star/Bangladesh/23-Aug-12