FE Report (March 01, 2011)
The central bank has started special inspections to verify reporting and holding and utilisation of foreign exchange by commercial banks, officials said Monday.
The Bangladesh Bank (BB) took the move against the backdrop of allegations that some commercial banks have been concealing the actual amount of foreign exchange they were holding.
"We'll take drastic action against the defaulting banks after receiving the inspection report," a BB senior official told the FE Monday, adding that the inspection team has started investigation to check foreign exchange deals including the latest position of their foreign exchange accounts.
The probe teams are now investigating into different aspects of foreign exchange dealings in line with the existing foreign exchange rules and regulations, the BB official added.
"The central bank will investigate at least 10 commercial banks to know their actual inflow and outflow of foreign exchange in recent months," the BB official said, adding that the central bank is now monitoring the overall forex market situation closely.
Besides, the inspection team will examine the latest position in regard to realization of export bills that are both due and overdue, the central bank officials confirmed.
"We're trying to find out any undisclosed fund held deliberately by the commercial banks using different techniques," a BB official said without elaborating.
Meanwhile, the BB has strengthened its intervention in foreign exchange market by providing support to the commercial banks for settlement of import bills.
"We've provided foreign currency support to the commercial banks to settle import payment bills for essential items including food grains, petroleum products, fertilizer and power plant equipment," another BB official said.
As part of the operation, the central bank sold US$25 million directly at market rate to a state-owned commercial bank (SCB) Monday.
The US dollar was quoted at Tk 71.30-Tk 71.32 in the inter-bank foreign exchange market Monday against Tk 71.30 of the previous working day, market operators said.
Besides, the BB has provided overdraft (OD) facilities for $25 million to the same SCB for settlement of its food grains and fertilizer import bills.
"We want to minimise the gap between supply of, and demand for, foreign exchange in the market by providing such support to the banks," the BB official said adding that the central bank will continue such intervention in line with the market requirement.
The Bangladesh Bank (BB) took the move against the backdrop of allegations that some commercial banks have been concealing the actual amount of foreign exchange they were holding.
"We'll take drastic action against the defaulting banks after receiving the inspection report," a BB senior official told the FE Monday, adding that the inspection team has started investigation to check foreign exchange deals including the latest position of their foreign exchange accounts.
The probe teams are now investigating into different aspects of foreign exchange dealings in line with the existing foreign exchange rules and regulations, the BB official added.
"The central bank will investigate at least 10 commercial banks to know their actual inflow and outflow of foreign exchange in recent months," the BB official said, adding that the central bank is now monitoring the overall forex market situation closely.
Besides, the inspection team will examine the latest position in regard to realization of export bills that are both due and overdue, the central bank officials confirmed.
"We're trying to find out any undisclosed fund held deliberately by the commercial banks using different techniques," a BB official said without elaborating.
Meanwhile, the BB has strengthened its intervention in foreign exchange market by providing support to the commercial banks for settlement of import bills.
"We've provided foreign currency support to the commercial banks to settle import payment bills for essential items including food grains, petroleum products, fertilizer and power plant equipment," another BB official said.
As part of the operation, the central bank sold US$25 million directly at market rate to a state-owned commercial bank (SCB) Monday.
The US dollar was quoted at Tk 71.30-Tk 71.32 in the inter-bank foreign exchange market Monday against Tk 71.30 of the previous working day, market operators said.
Besides, the BB has provided overdraft (OD) facilities for $25 million to the same SCB for settlement of its food grains and fertilizer import bills.
"We want to minimise the gap between supply of, and demand for, foreign exchange in the market by providing such support to the banks," the BB official said adding that the central bank will continue such intervention in line with the market requirement.
The Foreign Exchange market is generally known as the "Forex" and even the "FX" market. It is the largest financial market in the world.
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