BB suspends licences of seven money changers

The Bangladesh Bank on Wednesday suspended licences of as many as seven money changers, following allegations of their involvement in charging higher prices for foreign exchanges, particularly in US dollars required by travellers heading abroad.
Besides, the central bank has issued show-cause notices to 10 other money-changing houses, demanding explanations for selling foreign exchanges at elevated rates.
"We've suspended seven licences of the money changers and issued 10 show-cause notices against 10 more money changers," Md Mezbaul Hoq, spokesperson for the Bangladesh Bank, told the FE.
Mr Hoq also said that the suspended money changers were not only charging much higher prices for US dollars compared to the rates set by the Foreign Exchange Dealers Association, but they had also engaged in misreporting various transactions.
The licences held by money changers are issued by the Bangladesh Bank, and their primary operations involve trading foreign currencies with individuals through physical counters in the open market, commonly referred to as the kerb market.
This market serves as a platform for collecting dollars and other foreign currencies from international passengers, predominantly expatriate Bangladeshis.
Similarly, international passengers departing from Bangladesh for business and other purposes are among the major customers of these foreign currencies.
Presently, Bangladesh has around 235 money changers conducting business in cities including Dhaka, Chattogram and Sylhet. Contrasting the formal banking system where the US dollar was trading between Tk 109 and Tk 109.50, the informal market, or kerb market, saw rates soaring to Tk 116.95 to Tk 117.
People familiar with the development attributed this situation to several factors, including reduced US dollar deposits within the formal banking system, fixed dollar rate, a notable surge in students studying abroad and an upswing in illicit cross-border transactions targeting inflated prices.
Many commercial banks, particularly state-owned ones, are reportedly refraining from selling cash US dollars to travellers, thereby compelling them to resort to the kerb market to secure foreign currencies, they said.

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