Bangladesh Bank (BB) is not issuing licence to operate new money changers, considering the present 'over saturation and chaotic state' of the business, said officials concerned.
The central bank also thinks that there is no opportunity to issue licence now for operating new money exchanges in line with its existing policy. BB conveyed its opinion to Ministry of Finance (MoF), as MoF recently sought its view about the issue.
However, a number of entrepreneurs are showing interest to set up new money exchanges, they added.
The government had issued licences to 636 money changers from 1997 to 1999, according to BB data.
Some 234 licensed changers are now operating in the country, and the number is much higher than the market size, a high official of BB said.
Besides, a good number of money changers are allegedly engaged in endorsement and encashment of foreign currencies defying the central bank's rules.
Under the BB guideline, licensed money changers are allowed to run operations without having any branch. But many of them are conducting business with more than one branches, violating BB rules. Operations of the existing exchanges are also seriously hampered due to these illegal money changers.
Sector insiders said besides a number of illegal money changers in many areas, more than 50 are doing business without licence at Uttara in the capital.
These illegal exchanges are cent per cent floating and they change their names from time to time. They always remain untouched by adopting various other means also, they added.
Some private sector businessmen are filing applications to set up new money changers, although BB has not officially invited any such application. The applicants are trying to get permission to set up new money exchanges, according to MoF and BB sources.
"Now we don't see any valid reason for allowing new exchanges in the country. We know about the possible impact of new money changers on the financial market," said a senior BB official.
In September 1999, BB took a decision not to give permission for setting up new money changers, and issued a circular in this connection.
"We do not want to issue licence to any new money exchange for the time being. We think it is not the right time to allow new companies in this sector," he added.
Financial Institutions Division (FID) Deputy Secretary Md. Rizwanul Huda said on Tuesday, "We sent a letter to the central bank, seeking its opinion on issuing license to set up new money changers. BB is the licensing authority for money exchanges."
A number of money changers have been operating business for last one decade in Mirpur, Nilkhet, Malibag, Old Dhaka, Purana Paltan, Naya Paltan, Motijheel, Dilkusha, Kakrail and other areas of the capital.
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