The state-run Sonali Bank Limited (SBL) sought permission from the Bangladesh Bank (BB) Wednesday to settle all its overdue payments to other banks against fake 'inland bills' accepted in recent months.

"There was a verbal prohibition from the BB on accepting or settling payments against any 'inland bills' following the Hall-Mark loan scam that took place at the bank's Ruposhi Bangla branch," a senior official of the Sonali Bank told the FE Wednesday.

So the bank now needs to take permission from the central bank to settle the overdue payments against 'inland bills' to other banks, he said.

The SBL has landed in a difficult situation with the large amount of overdue payments to be made to other banks against the inland bills.

"Now the SBL needs to settle the payments as soon as possible for the sake of good relationships with the other banks concerned, he mentioned.

So SBL Managing Director and Chief Executive Officer Pradip Kumar Dutta wrote to the BB seeking necessary directions on settling those pending bills with other banks.

Sonali Bank presently owes about Tk 15 billion to 32 other local and foreign commercial banks as those banks purchased 'inland bills' in the local currency on acceptance of fake bills and papers from traders by the state-run commercial bank.

At least Tk 10 billion, out of the total amount of Tk 15 billion, was funded to the largest money swindler Hall-Mark Group by the other commercial banks against most of the fake bills and papers 'accepted' by the SBL's Ruposhi Bangla branch in the city.

Now those banks are continuously putting pressure on the Sonali Bank to settle the overdue payments with extra charges against a large number of 'inland bills' as their maturity dates have expired.

No bank can withhold the payment against 'inland bills' for an uncertain period as per the rules of UCP (Uniform Customs and Practice for Documentary Credits) -600 as is practiced worldwide.

As per the rule, 'the banks deal with documents and not with goods, services or performance to which the documents may relate.'

As per the UCP-600, the banks are also bound to pay against 'inland bills' to the clients, normally the commercial banks in this case.

"But the BB had imposed an unofficial ban on transactions in inland bills after the Hall-Mark scam exposed by the inspection team of the central bank. Therefore, the bank's overdue payments to the 32 commercial banks now stand at Tk 15 billion," the SBL official said.

So the SBL authority is now seeking the BB permission to settle all of its payments with the other banks for the sake of good business term.

Earlier, it was not required to take a prior approval from the BB to settle such transactions between two banks.

But now the SBL needs fresh directions as well as permission from the central bank to settle the overdue payments against 'inland bills' as the Anti-Corruption Commission has taken a legal move against the Hall-Mark Group and the concerned officials of the bank.

"There is no problem with the funds of the bank. The bank can pay all the overdue amounts to the other banks in a single day. But the problem is with the issue of 'inland bills', when the ACC is moving against it," the SBL official noted.

SBL officials don't know if the BB or the ACC will find further disparity and take action against the concerned officials after payment of the overdue bills.

Some SBL officials are even afraid of getting involved with the procedure of payments against the bills.

"We need directives from the BB as we do not know how to pay the overdue money to other banks against the fake 'inland bills'," the SBL official said.

Therefore, the SBL authority is seeking permission and directives that will pave the way for settling overdue payments. It also wants clear instructions from the BB about how to settle such payments to avert any further action by the ACC on the misappropriation of money on fake documents.

Other commercial banks have also sought clear directives from the BB about dealing with such 'inland bills.'

News: The Daily Financial Express/Bangladesh/18th-Oct-12