In order to provide fund to Padma Bridge project, Bangladesh Bank will particularly try to build a strong foreign exchange reserve, said Governor Dr. Atiur Rahman.

“We always help government by financing imports of agriculture inputs and petroleum products. In the case of Padma bridge, it is nothing different,” the central bank governor said.

He said Bangladesh Bank would help the government meet import costs related with the project, if needed.

Dr Rahman was replying to the journalists’ queries after announcing monetary policy statement for first half of current fiscal.

Earlier, Prime Minister Sheikh Hasina announced to construct Padma Bridge by local financing, after the World Bank rejected $1.2 billion loan deal fearing corruption.

She told the parliament that the government would use from foreign currency reserve, if necessary, to import construction materials for the bridge.

The Daily Sun/Bangladesh/ 19th July 2012

The central bank Wednesday dismissed the involvement in HSBC bank scandal of terrorism financing and money laundering by two local banks saying that “It was an old issue as instantly the authority concerned took regulatory actions at that time.”

“It was an old issue as it took places between 2005 and 2007. Bangladesh Bank (BB) already enforced regulatory actions in this regard,” said Deputy Governor SK Sur Chowdhury.

Chowdhury was replying to queries from reporters on involvement of the banks in money laundering activities jointly with the HSBC bank.

SK Sur Chowdhury attended a function organised by the central bank at its office to announce the new monetary policy for July-December period of the financial year (FY) 2012-13.

A US Senate Permanent Subcommittee on Investigations report suspected the two banks to have involvement in transacting funds for terrorist organisations, which got media coverage since Monday last.

The report is the result of an investigation on London-based HSBC Holdings PLC by the US subcommittee.

Chowdhury said the central bank keeps constant eyes on day-to-day banking activities in the entire banking sector in order to check illegal acts.

He said there is no such allegation against Bangladesh’s banking sector right now as we are very-much watchful on banks’ daily transactions.

“However, we are examining the US senate report and we will take actions if there is any current issue,” he said.

The BB high official said the central bank has reconstituted the Bangladesh Financial Intelligence Unit (BFIU) and posted highly skilled manpower in the department to carry out investigations in banks on money laundering and terror financing, if there is any.

“Our BFIU is now of global standards and the law is stringent than the previous one,” he said.

Governor Dr Atiur Rahman supplemented by saying that the US senate report has already mentioned that the regulatory actions against two local banks were taken that time.

“However, we would intervene if necessary,” Dr Rahman said.

He said the banking sector of the country was saved from the impact of global economic meltdown only because of rightful initiatives of the central bank.

The BB authority lays due emphasis on financial intelligence, he added.

He said the capacity of BFIU was strengthened over the past few years. “We will install latest software for use of BFIU soon,” he added.

Meanwhile, commenting on the issue, IBBL managing director Mohammad Abdul Mannan said that his bank has no link with money laundering or terrorism financing.

“There is no correlation between IBBL and HSBC regarding any such transaction, as it was mentioned by different media,” Mannan told daily sun.

He said the things the senate report identified was the sponsorship of Al Raji Foundation to IBBL. “I would say the sponsorship was given to them (Al Raji Foundation) after fulfilling the regulatory requirements and Bangladesh Bank and the Securities and Exchange Commission knew it,” he said.

The Daily Sun/Bangladesh/ 19th July 2012

The central bank has fixed office hours for all banks from 9:30am to 4pm for the month of Ramadan.

Transaction hours will be between 9:30am and 2:30pm with a prayer break from 1:15pm to 1:30pm, Bangladesh Bank said in a statement yesterday. Banking services will remain off on Friday and Saturday.

Earlier, the government set office hours for all its offices from 9am to 3:30pm with the same break for prayers.

The Daily Star/Bangladesh/ 19th July 2012

People will be discouraged to deposit their money with the banks as the government has imposed tax at source on profits and interests.

This will decrease the amount of deposits, which will ultimately lower investment in the country, affecting the country’s overall economy negatively, experts said.

Moreover, it is also not clear to the people whether the government will charge 15 percent tax on all fixed deposit accounts.

Economists opine, the government has imposed tax on deposits as it can be collected easily. What the government should do is to find out the persons who are able to pay tax. This kind of decision is not justified for all citizens, they said.

While placing the Finance Bill in the parliament for passage on June 27, the finance minister made a proposal to deduct 10 percent tax on profit and interests at source for depositors bearing TIN certificates and 15 percent for those who do not have the TIN.

The National Board of Revenue (NBR) has already taken initiative to deduct tax at source as per the provision. The NBR has issued circular to the banks about executing the provision from July 2012, which the banks have started informing their clients through letters.

The finance minister while placing the Finance Bill at the House said, “Those who have more than Tk 100,000 deposit but does not have any tax identifying number (TIN) will have to pay 15 percent tax at source. The clients having TIN will have to pay 10 percent tax.

Earlier in his budget proposal, the finance minister proposed to impose tax on all deposit accounts whatever the deposit amount was. Later, in face of criticism, Prime Minister Sheikh Hasina proposed to impose tax on clients who have at least Tk 100,000 deposit.

HSBC’s retail banking and wealth management chief Md Shafkat Hossain told banglanews24.com: “We are informing our clients about the government decision through letters, e-mails and SMSs. Using all kinds of communication system we have requested our clients to submit their TINs.”

Former Bangladesh Bank Governor Saleh Uddin Ahmed said, “According to my consideration, this kind of tax collection is not right and injustice to general clients.General people will be discouraged to deposit money in the banks. On the other hand, it is contradictory to another section of tax collection that states free income limit as two lakhs.”

The former BB governor observed that the government should reconsider the decision.

Non-government research organisation Centre for Policy Dialogue (CPD) Executive Director Dr Mostafizur Rahman said, “The decision will discourage small investors to keep money in the banks. Those who deposit pension money in the banks will be affected.”

“Due to this decision, those who are not under tax limit will also have to pay tax, creating discrimination among the people.”

The Daily Sun/Bangladesh/ 18th July 2012

Abul Kashem Md. Shirin, Deputy Managing Director of DBBL, seen at a workshop at LGED auditorium in Sunamganj.

Dutch-Bangla Bank Limited organised a day-long workshop on 'Money Laundering Prevention' for the managers of all private commercial banks at the LGED auditorium in Sunamganj.

Fifty managers from different commercial banks participated the workshop, said a press release Monday.

Abul Kashem Md. Shirin, Deputy Managing Director of DBBL inaugurated the workshop.

Officials from 'Bangladesh Financial Intelligence Unit' of Bangladesh Bank presented the keynote paper on managers' role regarding effective action plan of the Central Bank on prevention of Money Laundering.

Moreover, DBBL's Deputy Managing Director Abul Kashem Md. Shirin presented keynote paper on 'Mobile Banking', a revolutionary invention in the banking sector of Bangladesh, from the viewpoint of prevention of money laundering.

The Daily Sun/Bangladesh/ 18th July 2012