Dollar crisis: BB allows reinstatement of six banks’ treasury chiefs
The private bank treasury heads were removed from their positions on 8 August on charges of making excessive profits from the volatile dollar prices
The six treasury heads of private banks, who were removed from their positions on 8 August on charges of making excessive profits from the volatile dollar prices, have been allowed to return to their lost positions.
The Bangladesh Bank relieved the six treasury heads of Dutch Bangla Bank, Southeast Bank, Prime Bank, City Bank, Brac Bank and Standard Chartered Bank from the punishment following their apologies to the central Bank.
It issued a letter, a copy of which The Business Standard obtained, to the managing directors of the banks in this regard on Thursday.
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"The treasury heads who were served show-cause notice for manipulating the dollar market expressed regret and promised that they will not do such a work in future. Hence, the central bank has given the opportunity to the banks to post them as treasury heads again," Bangladesh Bank Spokesperson Serajul Islam told The Business Standard.
"At the same time, the banks have been allowed to show half of the amount they bagged from the volatile dollar market in May and June as their profits. They must use the rest amount for corporate social responsibilities," he, also executive director of the central bank, added.
Earlier, the Bangladesh Bank also served show-cause notices to managing directors of seven private commercial banks – NCC Bank, United Commercial Bank, Dhaka Bank, Mercantile Bank, Bank Asia, HSBC Bank and Eastern Bank – over their excessive profits from greenback trading.
According to a Bangladesh Bank analysis of the top 12 bank profits from 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's 504% or Tk126 crore, NCC Bank's 500% or Tk100 crore, Brac Bank's 417% or Tk75 crore, Dutch-Bangla Bank's 403% or Tk117 crore, Dhaka Bank's 353% or Tk106 crore, City Bank's 340% or Tk136 crore, Mercantile Bank's 245% or Tk120 crore, Shahjalal Islami Bank's 234% or Tk97 crore, United Commercial Bank's 205% or Tk135 crore, Eastern Bank's 159% or Tk43 crore, and Islami Bank's 140% or Tk136 core.
In the current financial year (FY23), the dollar market remains moderately stable thanks to the increase in remittance influx and a slight decrease in import costs. The central bank is now selling dollars at the rate of Tk96, which is being used for payments of government imports.
Meanwhile, on 11 September, banks capped the rates of the dollar at Tk108 for remittance inflows and Tk99 for export proceeds as part of an effort to curb volatility in the country's foreign exchange market.
The Bangladesh Foreign Exchange Dealers Association (Bafeda) and the Association of Bankers, Bangladesh (ABB) fixed the rates upon instructions from the central bank.
They also decided that the rate for import LC (letter of credit) settlement will be fixed by calculating the average remittance and export bill rates with a maximum increase of Tk1.
