Bangladesh Bank Fines Treasury Heads of 10 Banks for Selling Dollars at Higher Prices, Appeals Under Review

The Bangladesh Bank (BB) imposed fines of Tk 100,000 each on the treasury heads of 10 banks for selling dollars at higher prices, with the deadline for fine submission having passed. The officials of the banks in question have appealed to the central bank to review the decision. The BB board of directors, under the governor’s leadership, will now decide whether to revise the fines.

The 10 banks facing fines 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 is responsible for managing the demand and supply of taka and dollars. Some banks appoint deputy managing director-level officials as treasury chiefs. These officials argue that they typically follow the exchange rates set by senior management and shouldn’t be held accountable for selling dollars at higher prices.

Two managing directors of banks that appealed against the fines stated that there is a legal provision for appeals under the bank company act. They believe the fines were not imposed correctly and hence submitted their appeals.

It has been reported that, in addition to buying and selling dollars at higher prices, these banks also sold dollars to other banks and customers at elevated rates. Consequently, banks are avoiding purchasing remittance-earned dollars at higher prices, leading to a decline in the flow of remittance through the banking system. Some banks are even holding onto their dollars and not selling them to other banks, fearing penalties for selling at higher prices to other banks.