Dhaka, Dec 30: Inter-bank clearance of cheques for about Tk 5,000 crore suffered unusual delay during the last three days because of a technical glitch in the Bangladesh Bank's automated clearinghouse. Commercial banks have been asked to have their low value (less than Tk 5 lakh) cheques cleared manually, leaving them in queues for three to four days for a work that usually that takes a day. The central bank, however, continues clearing high-value (more thank Tk 5 lakh) cheques in a day through its back-up server located at Mirpur.

A high official of Bangladesh Bank said the main server of the central bank’s clearance house remained inoperative for the last few days. “The technical problem emerged three days back. We kept the main server shut to avoid further glitch. Experts are working to bring it normal and we are hopeful that the server will resume its full operation by Monday next,” Fazlur Rahman, Deputy General Manager of Bangladesh Bank said. He said the central bank today cleared about Tk 1704 crore high value cheques online through the Mirpur server while low value cheques worth about Tk 800 crore were cleared manually. The bank cleared about Tk 2500 crore a day on an average of which one third cheques were of Tk 5 lakh or below.  “Many clients expressed their utter dissatisfaction over the delay. We are trying to settle all the cheques by working beyond banking hours,” Habibur Rahman, manager of a branch of Islami Bank said.

Naz Hossain, Head of Banking, Standard Chartered Bank, said since the master clearing house is facing problem ultimately customers have to face delay. Mian QC Chowdhury, Senior Vice President of the United Commercial Bank said their branch level transaction faced severe problems for the crisis. The central bank had launched the system in early October this year to settle payments online among 1,100 branches of all 47 scheduled banks initially in Dhaka.

At the same time, it kept the manual settlement system open as a 'stand-by' solution. The system experienced problem within three weeks of its introduction. Bankers blamed the central bank's inadequate back-up support for the debacle. They also pointed out that Bangladesh Bank adopted the new technology without sufficient technical know-how and manpower. The central bank, however, denied the allegation of poor management, saying that such a technical fault is nothing unusual.

Source: The Independent, Bangladesh/31st Dec 2010

Prime Minister Shiekh Hasina on Thursday expressed disappointment at the fact that no money allegedly siphoned off by a section of politicians, businessmen and bureaucrats during the past political rules could be recovered yet.

At a cabinet meeting she asked Bangladesh Bank to bolster its anti-money laundering activities to improve the rate of success in recovering the money.

Bangladesh Bank and other state-owned agencies have not been able to recover a single penny since the Awami League-led coalition government assumed office in January 2009, sources said. Experiences of Nigeria and Philippines suggest that recovery process of stolen money is quite lengthy and may even take 15 years.

The issue is serious for Hasina’s government as the success of the initiative will legitimise its allegations that a section of politicians and businessmen—mostly loyal to BNP—siphoned off money to foreign banks during the 2001-2006 BNP rule.

Accusations of laundering a huge amount of money are frequently made by AL leaders against the two sons of former prime minister and BNP chief Khaleda Zia.

The Anti-Corruption Commission has already filed two cases—one each against Tarique Rahman and Arafat Rahman—in connection with money laundering.

It is likely to file more cases against them soon, sources said.

The initiative to recover stolen money was taken by the last caretaker govern-ment, which arrested over 200 politicians and officials on graft charges.

Many former ministers and lawmakers were charged with amassing illegal wealth and siphoning off money.

More than Tk 12 billion was seized on charge of money laundering during the 22-month-long rule of the caretaker administration, but the amount was recovered from local sources.

Assuming power in January 2009, the present AL government decided to carry forward the initiative.

A senior executive of Bangladesh Bank, said the central bank had already taken steps, including striking deals with a number of foreign central banks and international financial institutions, for information about the money stolen from Bangladesh.

The official, who was present at yesterday’s cabinet meeting, told the daily sun that Bangladesh Bank has also brought about changes in the existing money laundering law in line with suggestions from a multilateral organisation to get its membership.

Source: daily-sun, Bangladesh/31st Dec 2010

A new bank, 50 percent owned by non-resident Bangladeshis, has received a green light from Bangladesh Bank.

The central bank will seek applications from interested NRB entrepreneurs, said an official, after the BB's Board of Directors on Tuesday approved a proposal to set up the bank.

The central bank will also make a set of criteria for evaluating the application forms.

The proposal mentioned that the amount of foreign direct investment in Bangladesh is much lower than in neighbouring countries.

NRBs are interested to invest here and their demand for establishing banks owned by them was raised many times in different forums.

Considering the huge remittances sent by the NRBs, formation of such a bank to create a handsome foreign exchange reserve has opened up a positive side, the proposal said.

In line with a guideline, also approved by the board, the paid-up capital of the NRB bank will be Tk 400 crore. The NRBs will provide the half of the paid-up capital and the rest will be raised through a public offering.

An entrepreneur can hold a minimum of Tk 10 crore in shares or a maximum of 10 percent of the total shares. No share of the entrepreneur can be transferred in three years without the central bank's permission.

A non-refundable amount of $15,000 has to be deposited with the application.

There are about 50 local and foreign commercial banks operating in the country, of which 30 are private.

The approval for any new bank had been on hold from 2001, following the presence of more-than-required banks and criticisms from various quarters.

 Source: The Daily Star

Mutual Trust Bank Ltd (MTB), as a participant in the Investment Promotion and Financing Facility (IPFF), has signed a Master Facility Agreement with Bangladesh Bank.

Bangladesh Bank Executive Director S K Sur Chowdhury and MTB managing director and CEO Anis A Khan signed the agreement on behalf of their respective organisations at Bangladesh Bank Head Office on Tuesday, said a press release.

Bangladesh Bank’s joint director Hosne Ara Shikha, deputy director Rathin Kumar Paul, MTB deputy managing director Md Ahsan-uz Zaman, vice president Monzur Hassan and other officials of both the organisations were present at the occasion.

Under the agreement, Mutual Trust Bank will enjoy financing facility from the World Bank, administered by the Bangladesh Bank, for extending credit facilities to infrastructure projects under Public Private Partnership (PPP).

Source: Daily Sun

Islami Bank has been put under the scanner of Bangladesh Bank (BB) again for its alleged misuse of Zakaat Fund.
A BB official told the agency that the central bank started an investigation into the allegation against Islami Bank that the Bank misused huge amount of money, collected from the members of public as Zakaat. The central bank in November appointed an observer to Islami Bank after getting complaint that the bank was transferring huge suspicious fund to its subsidiary, Islami Bank Foundation.
The BB also imposed a ban on transfer of any fund from Islami Bank to its foundation while the observer would be identifying any suspicious transactions and activities of the bank and its foundation,
The BB official said the central bank received another complaint on December 15 against the Islami Bank for its alleged misuse of Zakaat fund. This time the central bank got the compliant from the Zakaat Board.
Established in 1982 under the umbrella of the Islamic Foundation, Zakaat Board collects, manages and oversees the Zakaat in the country.
In a letter to the BB governor, the Board said it is entitled to collect Zakaat through an account under the name of ‘Government Zakaat Fund’. But the Islami Bank opened a similar account in the name of ‘Islami Bank Foundation’ to collect Zakaat.
The Board said the matter was referred to an expert committee of the Islami Foundation for comment and the committee observed that operation of such account by Islami Bank was a violation of banking act.
The committee also observed that the Islami Foundation has been spending money from the Zakaat Fund in many projects and activities those are not supported by Islamic Shariah.
Referring to the opinion of the expert committee, the Board in the letter mentioned that the Islami Bank Foundation had been spending Zakaat fund to run different activities at their own choice instead of following the criteria, set in Holy Qura’n, for distributing and spending Zakaat.
The Board advised for taking initiative to stop such activities by the Islami Bank and take back the huge amount of money, collected through the Islami Bank Foundation account, which is legally belongs to the government Zakaat fund.
Islami Bank Foundation was also found operating an unauthorized micro-credit programme during a Bangladesh Bank investigation in May this year.
Any micro-finance institution or non-government organisation has to obtain permission from the Micro-credit Regulatory Authority (MRA) to run the credit programme. Islami Bank Foundation is yet to get any MRA licence.
According to MRA Act, 2006, organisations will face maximum Taka 5 lakh fine or one year in jail or the both if found running unlicensed micro-credit activities.
The Islamic Foundation earlier this year also filed a case against former BNP state minister for religious affairs Mosharref Hossain Shahjahan, former Jamaat lawmaker Delwar Hossain Saydee, and two others, on charges of misappropriating Taka 1.28 crore from the government Zakat Fund.

Source: The Independent