BB moves to closely monitor offshore banking facility

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Shakhawat Hossain
The Bangladesh Bank (BB) has directed commercial banks doing foreign exchange transaction to show in their monthly statements the 'invisible receipts' from sources both inside and outside the country.
The central bank asked the commercials banks to follow certain rules under the Guidelines for Foreign Exchange Transaction 1996 while showing the 'invisible receipts', according to a BB circular released Monday.
"The move has been taken to monitor the off-shore banking closely," said a senior BB official.
The official said the move has become imperative as the central bank had no effective system of monitoring the off-shore banking as the 'invisible receipts' by the industrial units in the export processing zones (EPZs) and Karnafuli Fertiliser Company Limited (KAFCO) are not being reported.
"But from now on the BB will be able to monitor the growing 'invisible receipts,'" he said.
The central bank has, however, raised no objection to the monthly statements on export earning, import payments and local expenditures by some 481 industrials units in the country's eight EPZs.
The cumulative investment by the units stood at US$ 1374.73 million until March last. Some 2.1 million locals are employed by the units which have one fifth share in the country's annual export income.
Bangladesh exported goods worth $ 14.11 billion in 2007-08 fiscal year.
A former central bank deputy governor said the latest move should not be seen as intervention in the off-shore banking by the central bank although the EPZ units allover the world enjoy such facility.
"There might be some irregularities on 'invisible receipts' which have prompted the BB to take the move," said Khondakar Ibrahim Khaled who is now acting as the chairman of the Bangladesh Krishi Bank.
The central bank circular said commercial banks doing foreign exchange transaction will have to submit their monthly statements as per new rules within 15 days of the next month.
Bangladesh Export Processing Zone Authority (BEPZA) has introduced off-shore banking facility to cater to the financial need of the foreign owned and join venture units in the EPZs.
At present, foreign banks like Standard Charter Bank Ltd, HSBC Ltd, Woori Bank Ltd, Citi N.A. Bank Ltd and Commercial Bank of Ceylon in Bangladesh are doing off-shore banking.
Local banks also provide off-shore banking facility. They are Prime Bank Ltd, Dhaka Bank Ltd, South-East Bank Ltd, National Bank Ltd, Eastern Bank Ltd. (EBL) and Bank Asia Ltd.
More local banks have also acquired off-shore banking license from BB, according to BEPZA.