BB seeks authority to penalise banks for violating forex rules
FE Report | Sunday, 15 June 2008
The central bank has sought authority to penalise any bank or financial institution violating foreign exchange rules and regulations.
The Bangladesh Bank (BB) has already sent a proposal on amendments to the Foreign Exchange Regulation Act 1947 to the finance ministry to authorise it to punish the violaters of the act.
"We have proposed the finance ministry to empower the central bank to impose penalty on commercial banks or their employees for violating any part of the amended law," a BB senior official told the FE.
He also said the central bank has taken the move aiming to strengthen its monitoring relating to foreign exchange transactions.
"The central bank will fix the penalty amount after considering other rules and regulations," he added.
Currently, the central bank is authorised to penalise banks and non-banking financial institutions (NBFIs) anywhere between Tk 10,000 and Tk 0.5 million for failure to submit reports related to money laundering.
The interim government earlier sought a final draft report from the central bank to amend the existing Foreign Exchange Regulation Act to make it time-relevant and ensure its effective implementation in line with international standards.
The existing law was amended in 2002 to increase the period of punishment for violating foreign exchange rules and regulations up to four years from two years earlier, the official noted.
"We have prepared the final proposals on the basis of opinions from different stakeholders including business community, bankers and senior government officials for amendment of the law," another BB official said.
He also said all types of foreign exchange transactions will be brought under the amended law to ensure proper scrutiny.
"Definition of resident and non-resident foreign currency account holders has been included in the final draft proposals to guide the banks in opening such accounts," the BB official noted.
They also said the move has been taken to facilitate foreign trade through specifying some definitions including export, import, capital account, current account and residence to resolve confusions of the banks.
Some neighbouring countries including India, Pakistan and Sri Lanka have already amended their foreign exchange rules and regulations in line with the international practices.
The Bangladesh Bank (BB) has already sent a proposal on amendments to the Foreign Exchange Regulation Act 1947 to the finance ministry to authorise it to punish the violaters of the act.
"We have proposed the finance ministry to empower the central bank to impose penalty on commercial banks or their employees for violating any part of the amended law," a BB senior official told the FE.
He also said the central bank has taken the move aiming to strengthen its monitoring relating to foreign exchange transactions.
"The central bank will fix the penalty amount after considering other rules and regulations," he added.
Currently, the central bank is authorised to penalise banks and non-banking financial institutions (NBFIs) anywhere between Tk 10,000 and Tk 0.5 million for failure to submit reports related to money laundering.
The interim government earlier sought a final draft report from the central bank to amend the existing Foreign Exchange Regulation Act to make it time-relevant and ensure its effective implementation in line with international standards.
The existing law was amended in 2002 to increase the period of punishment for violating foreign exchange rules and regulations up to four years from two years earlier, the official noted.
"We have prepared the final proposals on the basis of opinions from different stakeholders including business community, bankers and senior government officials for amendment of the law," another BB official said.
He also said all types of foreign exchange transactions will be brought under the amended law to ensure proper scrutiny.
"Definition of resident and non-resident foreign currency account holders has been included in the final draft proposals to guide the banks in opening such accounts," the BB official noted.
They also said the move has been taken to facilitate foreign trade through specifying some definitions including export, import, capital account, current account and residence to resolve confusions of the banks.
Some neighbouring countries including India, Pakistan and Sri Lanka have already amended their foreign exchange rules and regulations in line with the international practices.