Dollar crisis: 6 more banks exonerated from charge of making excessive profit
The central bank asked the banks to keep half of the profit made from dollar trading in May and June to their corporate social responsibility (CSR) funds
The Bangladesh Bank has relieved six more banks from the charge of making excessive profit from buying and selling dollars.
These banks are Bank Asia, Mercantile Bank, NCC Bank, United Commercial Bank, Dhaka Bank and HSBC Bank, said the Bangladesh Bank in a letter issued to the managing directors of the six banks on 25 September.
In the letter, the central bank said the complaints raised against the banks have been settled. Those banks will have to keep half of the profit made from dollar trading in May and June to their corporate social responsibility (CSR) funds. The banks were allowed to keep the remaining half of the profit as their income.
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Earlier, the central bank had ordered the banks to keep their entire profit made from dollar trading in May and June in a separate fund.
On 7 September, the Bangladesh Bank sought explanation from these six banks for making excessive profit from buying and selling dollars and asked them to reply within five working days. In response, the banks wrote to the central bank seeking forgiveness.
So far the central bank has exonerated 12 banks in total from several charges, including making excessive profit from dollar trading and providing wrong information. Previously it acquitted Prime Bank, Brac Bank, City Bank, Dutch-Bangla Bank, Southeast Bank and Standard Chartered Bank. The central bank also reconsidered the decision to remove the heads of the treasury department of these six banks and gave them the opportunity to return to their previous positions.
According to an analysis of the profits that the top 12 banks made through dollar sales, Bank Asia posted a 770% or Tk177 crore year-on-year growth in income in January-June this year, followed by Prime Bank 504% or Tk126 crore, NCC Bank 500% or Tk100 crore, Brac Bank 417% or Tk75 crore, Dutch-Bangla Bank 403% or Tk117 crore, Dhaka Bank 353% or Tk106 crore, City Bank 340% or Tk136 crore, Mercantile Bank 245% or Tk120 crore, Shahjalal Islami Bank 234% or Tk97 crore, United Commercial Bank (UCB) 205% or Tk135 crore, Eastern Bank 159% or Tk43 crore, and Islami Bank 140% or Tk136 core.
Due to the increase in remittances and a slight decrease in import costs in the current financial year, the dollar market has become somewhat stable. Currently, the central bank is selling dollars at Tk96.
However, the interbank exchange rate on Wednesday ranged from Tk100.93 to Tk107.40.
Meanwhile, to even more stabilise the market, the Bangladesh Foreign Exchange Dealers Association (Bafeda) and the Association of Bankers Bangladesh (ABB) has set a single exchange rate for dollars for all the banks.
The maximum rate for bringing in remittances will be Tk107.50 per dollar and for encashing export proceeds it will be Tk99. It has also been decided that the banks will settle the import letter of credit (LC) by adding a maximum of Tk1 to the weighted average buying cost of dollars.
Meanwhile, the central bank continues to sell dollars to meet government import expenditure. In the current fiscal year, the central bank has sold $3.4 billion till Wednesday, while it sold $7.6 billion to banks in the whole of the last fiscal year.
As of Wednesday, the central bank had $36.46 billion in reserve.
