Bangladesh is considering an option for resuming financial transactions with an alternative bank, UAB, of Myanmar following US sanctions on two commercial banks in the neighbouring country.
As part of the process, sources said, commerce ministry has asked the Bangladesh Bank (BB) to chart the next course of action and communicate with the Bangladesh mission in Yangon.
The mission has already proposed the bank's name and given a detailed outline to resolve the issue.
The UAB is a leading private commercial bank in Myanmar, established in 2010.
An additional commerce secretary hopes to resume financial transitions as early possible as Bangladesh has to import some key essential items, including onion, in times of crisis from Myanmar.
Following the US restrictions, the BB also asked local banks to cease from engaging financially with the Myanmar Foreign Trade Bank (MFTB), and the Myanmar Investment and Commercial Bank (MICB).
On 21 June 2023, the US finance ministry imposed sanctions on the two state-owned banks of the neighbour and its defence ministry.
Later, the US Embassy in Dhaka requested the foreign ministry of Bangladesh, closing all the accounts of Sonali Bank Ltd with the bank duo.
Mainly, Sonali Bank has business accounts with these two banks and it has already frozen such accounts.
Almost all bilateral trade with Myanmar was operated by Sonali Bank before closing transactions.
The largest state-run bank has $17,000 and $200,000 in deposits with the MFTB and the MICB respectively. It cannot withdraw/use/transfer the deposits.
On the other hand, Sonali Bank has deposits of around $100,000 and $1.0 million from the MFTB and the MICB correspondingly.
According to a source concerned, the Myanmar ambassador in Bangladesh has been trying to get the funds and top officials also sat with Sonali Bank to this end.
No financial transaction is being operated now. Earlier, the BB asked not to transfer the money to those Myanmar banks.
When contacted, a senior official of the state bank said, "We'll take step about the transaction issue if we get a fresh instruction from the BB."
Bilateral trade between Bangladesh and Myanmar is negligible, although they have huge trade potential.
The traded products include bamboo, ginger, peanut, saltwater prawn and fish, blankets, candy, plum jams, footwear, frozen foods, dried plums, garlic, rice, mung beans, chemicals, leather, jute products, tobacco, plastics, wood, knitwear and beverage.
Bangladesh exported around $4.0 million to Myanmar in fiscal year 2020-21, while the volume of import by Bangladesh around $130 million in the same fiscal.
During Bangladesh's onion crisis with India in 2019, the country imported onions from Myanmar.
A new controversial currency policy has introduced by the military-backed government of Myanmar.
Meanwhile, the new foreign-exchange rules have drawn criticism from embassies, global organisations, development agencies, foreign investors, foreign businesses, chambers and entities, reads a document.
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