All commercial banks in Bangladesh must report their foreign exchange (forex) transactions statements online from January to the central bank. Under the new system, a bank will have to report all types of its foreign exchange transactions, including inland bill purchase (IBP), to the Bangladesh Bank (BB) on a daily basis using the central bank’s web portal, said a BB circular issued on Monday. Currently, banks are allowed to submit various reports manually in physical paper formats.

The reporting entities however were asked to continue with the existing practice of submission of reports until further order.

The online reporting system will help check manipulative practices, frauds and scams, like Hallmark loan scam, said a BB official.

He also said the banks normally submit their reports relating to foreign exchange transactions on a monthly basis which makes it impossible for the BB to scrutinise the same properly. The central bank has taken different measures against the backdrop of rising trend of large-scale irregularities in purchasing and providing acceptance of the bills against local LC (letter of credit)-denominated foreign currency by various bank branches in recent months.

As part of the measures, the Foreign Exchange Operation Department of BB has already started monitoring export transactions through online reports submitted by the foreign exchange branches, officially known as authorised dealer (AD) branches of the banks. In addition to export transactions, the BB has developed an online reporting system for all types of cross-border foreign exchange transactions including foreign exchange transactions through inland back to back LCs, says the circular.

It has come to the notice of Bangladesh Bank that ADs are making inordinate delay in forwarding the applications for obtaining the approval on settlement of such payment, it also said.

“ADs are, therefore, advised to submit the applications to concerned offices of Bangladesh Bank for post facto approval within 15 days of the following month of effecting the payment,” said the circualr.

Currently, some 858 ADs of 47 scheduled banks are operating their businesses across the country.

News: The Daily Independent/Bangladesh/11th-Dec-12