Treasury chiefs of 10 banks appeal against fine

Signage of Bangladesh Bank is pictured in Dhaka, Bangladesh, 19 July 2023.

The Bangladesh Bank (BB) at the beginning of this month fined treasury heads of 10 banks Tk 100,000 each for selling dollars at higher prices. The deadline to submit the fines was on Monday. The officials of the banks concerned, however, appealed to the central bank to review the decision of fine. The BB board of directors headed by the governor would now take a decision in this regard.

The 10 banks are: Mercantile Bank, Premier Bank, BRAC Bank, Modhumoti Bank, Midland Bank, Exim Bank, Social Islami Bank, Al-Arafah Islami Bank, Shahjalal Islami Bank, and Trust Bank.

In commercial banks, the treasury department works on demand and supply of taka and dollar. Deputy managing director level officials are posted as treasury chiefs in some banks. They maintain that usually the highups of banks set the exchange rate of dollars and they just follow orders. That’s why they cannot take the liability of selling dollars at higher prices.

Managing directors of two banks, who appealed against the decision of fine, on condition of anonymity told Prothom Alo, “There is a chance to appeal against this fine as per bank company act. We think this fine was not imposed properly and that’s why we file the appeal.”

Sources said that alongside buying and selling dollars at higher prices, these banks also sold dollars to other banks and customers at higher prices. As a result banks are refraining from buying dollars earned by remittance at higher prices. This led to decline in inflow of remittance in the banking channel. Some banks are not selling dollars to other banks although they have dollars. Because, some banks were penalised for selling dollars at higher prices to other banks.

About the measures against treasury chiefs, Policy Research Institute’s (PRI) executive director Ahsan H Mansur told Prothom Alo that the main problem is not fixing the market based exchange rate of dollars. The Bangladesh Bank has become busy penalising those who sell at higher prices instead of focusing on large scale corruption and money laundering. This will encourage the big criminals more.