The Bangladesh bank (BB) Wednesday annulled the authority of branch offices of different banks on payment of local bills under various L/Cs (Letters of Credit).

From now on, the branch office management must obtain prior approval of the respective head offices in case of acceptance of import LCs, which linked to payment of bills through both local and foreign currencies, according to the circular.

The central bank authority said it has found in recent investigations that importers are involved in mobilising funds (cash) from banks under the provision of ‘Accommodation Bill’ by opening LCs though there are no real business transactions.

“As a result, banks are losing their liquidity strengths, ultimately posing threat to banks’ cash base,” reads the BB circular.

The Daily Sun/Bangladesh/ 12th July 2012

The central bank yesterday warned banks against purchases of fake trade bills, a phenomenon that threatens to undermine the banking system.

The warning comes in response to the precarious financial health of some banks, due to purchases of fake bills which have drained crores of taka out of them.

In a notice issued yesterday, Bangladesh Bank has forbidden decisions at branch level on purchases of bills -- in local or foreign currency -- until further notice.

The branches will have to take written permission from the head office to do such transactions, the regulator said.

The accommodation bills of letters of credit (LC), in any currency, must not be honoured without verification of the items, the central bank said.

Banks usually open LCs and purchase or discount or negotiate bills under LCs in genuine commercial and trade transactions of their borrowers. The problem arises, when trade transactions between two persons are unreal.

The central bank said it has detected an increasing tendency to cash in LCs without any real trade taking place.

A senior official of a commercial bank said the fraud happens in two ways: firstly, influential businessmen exercise their influence to take out money against the LCs, and secondly, a section of bank officials assist the businessmen to do so.

A top central bank official said it occurs frequently. "We are taking measures to stop this malpractice," he said.

"We have sought information from the banks. We will take necessary steps after we receive all information."

In May, Bangladesh Bank retrieved Tk 523 crore from four local banks on behalf of Sonali Bank after non-payment for a transaction of Beximco Group.

Two sister concerns of Beximco Group -- Beximco Ltd and Bextex -- transacted goods between themselves via LCs in takas.

Bextex, which was the seller, obtained an LC from Sonali Bank for the transaction, while the buyer Beximco Ltd committed to pay via four banks: Janata Bank, Agrani Bank, Rupali Bank and Exim Bank.

As it turns out, Beximco Ltd did not pay the four banks, and they, in turn, did not pay Sonali Bank.

Also in May, Sonali Bank relieved three of its senior officials of their duties for lending Tk 2,638 crore to a little-known Hallmark Group in a similar case.

The Daily Star/Bangladesh/ 12th July 2012

The country’s banking monitoring system should be improved more to prevent circulation of fake notes--the trend of which is on rise in recent days. A noted banker Mirza Mahmed Rafiqur Rahman, additional managing director of United Commercial Bank Ltd (UCBL), made the observation while addressing a seminar on “Raising Awarness Against  Fake Notes” at Bangladesh Institute of Bank Management (BIBM) on Tuesday.

Waking up to the threat of fake currency flooding country’s economy, the UCBL top executive said that the trend should be checked and stopped immediately.

He also stressed the need for more media attention to make public aware about the fake currency that haunts the country’s economy.

He advised the banking sector regulator to run advertisements in media and billboards at various public important areas like railway stations, bus terminals, hat-bazars and other public meeting places to make the public aware.

The advertisement may carry salient features and characteristics of originals currency notes of different denominations which might be displayed clearly.

Held at the BIBM auditorium, the daylong programme was addressed among others by  Bangladesh Bank Deputy Governor Md. Abul Kashem, BIBM Director General Professor Dr. Toufic Ahmad Chowdhury, Dasgupta Asim kumar, Bangladesh Bank executive director SM Aminur Rahman and Janata Bank Managing Director Nazmul Haque.

Dwelling on the rising trend of fake notes in circulation, the Bangladesh Bank Deputy Governor also urged the government to take stringent measures to check menace and exemplary punishment for those who would be found involve in any sort of irregularities in this regard.

Speakers at the seminar informed that most of the banks have already undertaken a series of measures to face the problem and make people aware about the spread of counterfeiting of notes and its impact on the economy.

As a part of tackling the problem, many of the banks have already brought all their note-counting halls and the premises under the watch of CCTV camera round the clock.

They also advised the central bank to strengthen monitoring in all bank branches, countrywide ATM booths and launch surprise visit to check the menace.

The Daily Independent/Bangladesh/ 11th July 2012

Dr. Mohammed Haider Ali Miah, Additional Managing Director of EXIM Bank, inaugurates an ATM booth at Shimrail Branch of the Bank in Narayanganj Tuesday.

Export Import Bank of Bangladesh Limited opened an ATM booth and a e-corner at its Shimrail Branch in Narayanganj Tuesday.

Dr. Mohammed Haider Ali Miah, Additional Managing Director of EXIM Bank inaugurated the booth as chief guest, said a press release.

Meanwhile, EXIM Bank Limited of Gazipur Chowrasta Branch on Monday awarded stipends to 15 meritorious and poor students of Gazipur Sadar those who are studying in college and university level in different institutions.

According to Bank sources, every year they provide a number of stipends to the talent students for their outstanding performance with a view to social development.

The Daily Sun/Bangladesh/ 11th July 2012

Hafiz Ahmed Mazumder MP, Chairman of Board of Directors of Pubali Bank Limited, speaks at the 3rd conference of regional and corporate branch managers at Bank’s head office in Dhaka.

Pubali Bank Limited organised its third conference of regional and corporate branch managers at the Bank’s head office in Dhaka.

Hafiz Ahmed Mazumder MP, Chairman of Board of Directors of Pubali Bank was present as chief guest while Helal Ahmed Chowdhury, Managing Director of the Bank presided, said a press release Tuesday.

The Daily Sun/Bangladesh/ 11th July 2012