The total deposit by Bangladeshi citizens in various Swiss banks totalled Tk5,566 crore in 2016, and Tk4,417 crore in 2015

The Bangladesh government has already sought information about Bangladeshi depositors in Swiss banks but are yet to receive a reply, said Finance Division officials.

They said Bangladesh Bank had sent several letters to the Swiss National Bank over the last three years seeking the information. But the SNB authorities have never answered.

However, India will be receiving information about the country’s depositors in Swiss banks under the “Automatic Exchange of Information” agreement signed between Switzerland and India.

As there is no such agreement with Bangladesh, the government will again seek information on depositors  in Swiss banks, as SNB data shows that deposits by the Bangladeshis surged by 19% in 2016 from a year ago.

Also Read – Bangladeshi money in Swiss banks jumps by 19%

Officials said the information will help Bangladesh take back money believed to be laundered there.

Last May, Switzerland bent to pressure from the United States and the European Union and relaxed its law of secrecy, which for generations has been the principal cause of attraction for deposits.

Following the development, the Federal Banking Commission of Switzerland said that it would abolish the so-called Form B bank accounts that have enabled dictators, drug barons, arms dealers and the like to keep ill-gotten gains in Switzerland without disclosing their identity.

Swiss bank insiders said the change in rules could shed light on rumours that former Iraqi President Saddam Hussein of Iraq deposited a fortune in Switzerland.

Swiss banks have denied holding any accounts in Hussein’s name, but the insiders said his money could be held in Form B accounts.

On Thursday, the SNB published a series of annual reports which revealed that deposits by Bangladeshi citizens have gone up significantly.

The report for the year 2016 disclosed that there has been a 19% increase in deposits since 2015. The total deposit by Bangladeshi citizens in various Swiss banks totalled Tk5,566 crore in 2016, and Tk4,417 crore in 2015.

It was also revealed that, despite the reduction in foreign currency deposits in Swiss banks over the last few years, deposits by Bangladeshi citizens have been increasing steadily.

Switzerland has been famous for secret bank deposits by wealthy people for a long time. While depositing the money, the name and address of the depositor was kept confidential and the money was kept on the basis of a code number.

But since 2002, the Money Laundering Prevention Act has been widely implemented to prevent money laundering worldwide.  As a result, they have been publishing information on deposits from different countries since.

Among the letters sent by Bangladesh Bank to SNB, one sought the possibility to sign a Memorandum of Understanding with the SNB. It has not received any response yet.

Bangladesh’s central bank also sent two letters to SNB seeking wealth information about controversial Bangladeshi businessman Moosa Bin Shamsher and his family. SNB didn’t respond.

It is alleged that a large amount of money was laundered from different branches of multinational bank HSBC to SNB from Bangladesh.

SNB signed agreements with 22 countries including India and Pakistan during the last several years.

Former Finance Adviser to the caretaker government AB Miza Azizul Islam claimed wealthy people who launder money out of Bangladesh to Swiss banks enjoyed political backing.

Most of the money was laundered by unscrupulous businessmen through under and over-invoicing in international trade, he said.

“The government should take stern action against those dishonest wealthy people having deposits in Swiss banks by seeking information,” Mirza Aziz told the Dhaka Tribune.

Subhankar Saha, executive director of Bangladesh Bank, said different government agencies including Bangladesh Bank are “trying to take strict measures against the money laundering by Bangladeshi businessmen through over and under-invoicing.”

However all of the deposits by Bangladeshis in Swiss banks were not directly from Bangladesh and a large portion of the money came from across the globe, he added.

It may help cut govt's interest expenses

The government has planned to introduce a buyback arrangement for its securities to bring dynamism in the secondary market, officials said.

They said the Ministry of Finance, Bangladesh Bank (BB) and Primary Dealer (PD) banks will work jointly to formulate a policy and implement the plan.

At present, the government buys back its securities from the market as and when it thinks necessary due to absence of any policy. If implemented, the buyback would take place under the policy.

The decision emerged at a meeting of senior officials of the ministry, the BB and treasury heads of all the PD banks at the central bank headquarters in the capital Sunday, with BB executive director Dr. Abul Kalam Azad in the chair

"We're now working to boost the secondary securities market through buyback and other initiatives," a senior BB official told the FE.

He said the yields on the buyback securities would be fixed in line with the market rates.

Earlier, the government bought back its securities worth Tk 11.16 billion in the fiscal year (FY) 2007-08 and FY 2009-10, according to the BB officials.

The latest move came against the backdrop of falling trend in trading at the secondary market mainly due to the lack of adequate securities.

Trading of both the Bangladesh Government Treasury Bonds (BGTB) and treasury bills (T-bills) dropped by more than 37 per cent in May than that of the previous month.

Total turnover that included both buy and sale came down to Tk 11.22 billion in May from Tk 17.87 billion a month ago, according to the central bank's latest statistics.

At the meeting, the PD banks proposed the government to formulate a buyback policy that will allow holding reverse auction of its securities as and when necessary.

"We also want the government to come forward with 'unconditional attitude' for encouraging the stockholders to participate the proposed reverse auction," a treasury head of a PD bank said, following the meeting.

He said the move would help cut the government's interest expenses against such securities while contributing to boost the secondary market.

The ministry officials informed the meeting that the government wanted to issue new securities and buy those back simultaneously in bringing dynamism in the market.

Currently, three T-bills (91-day, 182-day and 364-day) are being transacted through auctions to adjust the government borrowings with the banking system. Besides, five government bonds with tenures of 02, 05, 10, 15 and 20 years respectively are being traded on the money market.

The BB had earlier selected 20 PD banks to deal with the government securities on the secondary market.

Bangladesh Bank (BB) on Monday postponed agriculture credit recovery from haor areas across the country due to huge damages in the area by flashfloods.

"The credit recovery remains postponed until the situation is improved," according to a circular issued by BB here Monday.

BB also asked the banks to provide facilities for re-scheduling the credit through relaxation of down payment or easy installment.

BB also instructed the scheduled banks to provide new credits in different crops including planted aman and fisheries considering the real situation of the area.

The central bank also asked the commercial banks to provide credit at concessional interest rate for robi crops and import alternative crops such as pulses, oilseeds, corns and spices.

BB ordered the banks to provide necessary credit to affected farmers for rearing poultry birds, cattle and purchasing fodder.

In another circular, BB also asked all schedule banks and financial institutions to provide financial assistance and reliefs (food, clothes, pure drinking water and medicines) among the flood affected people in haor areas under their Corporate Social Responsibility (CSR) activities.

The recent flash flood caused by incessant rain over the last few days has damaged crops in the country's haor areas under Sylhet, Sunamganj, Netrokona, Kishoreganj, Habiganj, Moulovibazar and Brahmanbaria districts.