Bangladesh Bank Governor Dr Atiur Rahman receives donation from Association of Bankers Bangladesh for Bannaya Prani Sheba Foundation at a function at Sreemangal, Sylhet on Saturday.

News: The Daily Sun/Bangladesh/21th-Oct-12

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

The central bank has asked the banks to install fake note detecting machine in all the cattle markets approved by the Dhaka City Corporation (DCC).

This is for the second time that such a move has been taken in addition to deployment of adequate security forces in the cattle markets where sacrificial animals will be sold on the occasion of Eid-ul-Azha. The directive was issued to keep a check on the spread of fake notes as culprits dealing with counterfeit notes become active during the festivals every year.

All the commercial banks in assistance with the law enforcing agencies will render the free service round the clock in the city and also across the country, said a BB order issued on Wednesday.

Some 20 cattle markets would be set up in the DCC area for this Eid. The BB has provided 80 scanning machines to the Dhaka Metropolitan Police for cattle markets under the DCC area, 75 for other areas of the country and 25 for the Border Guard Bangladesh (BGB).

Last year, the BB gave 35 machines to police and Rapid Action Battalion (RAB).

Members of the intelligence agencies have already been asked to keep sharp watch on buyers to check payment of fake banknotes after purchasing sacrificial animals.

News: The Daily Independent/Bangladesh/18th-Oct-12

Country’s call money market stays stable ahead of Eid ul Azha and Durga Puja as commercial banks have taken short term measures and that Bangladesh Bank supplied liquid cash in to the market. “We have taken steps through our treasury bill purchase and other means to keep cash flow normal in the market,” said Mohammad Humayn Kabir, deputy director, debt management department of Bangladesh Bank.

The highest call money rate hit 12.50 per cent for non bank institutions on Tuesday. Most deals were settled in between 6 to 12.50 percent. However, weighted call money rates for the banks was 10.18 percent while the previous Tuesday it was 8.72 per cent, said the BB official.

Total turnover in the call money market was Tk 6,453.50 crore on Tuesday while the previous Tuesday it was Tk. 6,909 crore.

State owned commercial banks borrowed the highest amount of money from the call money market. On Tuesday, Agrani Bank’s borrowing stood at Tk. 1,043 crore while Sonali Bank’s Tk 926 crore.

Foreign commercial banks borrowed an amount of Tk 121 crore, while specialised banks 336 crore, private commercial banks Tk 6,408 crore and the non bank institutions borrowed Tk 783 crore respectively.

The banks have also taken steps to keep call money market stable ahead of two top festivals including Durga Puja. The short-term borrowings normally increase before the Eid as demand for cash rises. This year a substantial amount of fresh fund was injected by the BB in to the market, said Shymal Kumar Sadhu, executive of ONE Bank Ltd.

Besides, the central bank is also providing a substantial amount of Tk 200 million in fresh notes to avoid the crisis of funds during religious celebrations.

"The central bank has used different monetary instruments including re-selling agreement (repo) to keep call money market stable before the Eid and Durga Puja," said Md. Abdur Rahim, general manager of Bangladesh Bank, Motijheel Branch.

Moreover, BB has provided fresh fund by purchasing the US dollars from the commercial banks directly to keep the exchange rate of the Bangladesh Taka stable against the green back, Rahim also explained.

BB on Tuesday has provided liquidity supports for banks worth of Tk 10,897.32 crore.  Of the amount, it injected an amount of Tk. 1,863 crore against special repo and Tk 9,034.32 crore against Treasury bonds and bills.

News: The Daily Independent/Bangladesh/18th-Oct-12

Bangladesh Bank (BB) has asked the management of all commercial banks operating in the country to check validity and authenticity of IRC (Import Registration Certificate) submitted by businesses before accepting L/Cs .

The central bank authority Tuesday issued a circular in this regard.

“Banks must ensure validity and authenticity of IRC to prevent fraudulence,” reads the circular.

From now on, banks will need to send IRCs to the office of the Comptroller of Import and Export Directorate (CIED) for clearance before accepting L/Cs, according to the circular.

The central bank sources said all head offices, principal offices and authorised dealers of banks were served this circular separately.

Earlier, the office of the CIED had issued a public notice seeking cooperation of commercial banks and their authorised dealers to check IRCs to prevent fraudulence activities.

News: The Daily Sun/Bangladesh/18th-Oct-12