Govt bars co-op societies from using \'bank\' tag

Government authorities in a meeting of regulators ordered Sunday imposing bar on the cooperative societies using the tag 'Bank' in their operations, as there have been stunning instances of deception.
Two financial regulators were assigned to the task of executing the prohibitive action, officials said.   
The step came from a coordination meeting of major watchdog bodies, namely Bangladesh Bank (BB), the Bangladesh Securities and Exchange Commission (BSEC), the Office of the Registrar of Joint Stock Companies and Firms, the Insurance Development and Regulatory Authority (IDRA), the Micro-credit Regulatory Authority (MRA), the Department of Cooperatives (DoC) and Bangladesh Telecommunication Regulatory Commission (BTRC).
The meeting was held at the central bank headquarters in the capital with the newly appointed Bangladesh Bank Governor, Fazle Kabir, in the chair in the wake of belt-tightening in spheres related to banking following a series of unwanted incidents.
"The representatives of Office of the Registrar of Joint Stock Companies and Firms and DoC were requested at the meeting to take effective measures in this connection," a senior BB official told the FE, after the meeting, about the measures restricting the use of 'bank' tag.
The government has already amended the related rules and regulations imposing restrictions on the use of word 'Bank' by any companies and establishments, in order to protect innocent depositors, the central banker explained.
"But a few cooperative societies are still running businesses using the word 'Bank' in their day-to-day operations," the BB official noted.
The meeting also discussed different other issues like development of bond market and re-registration of SIM (subscriber identification module) at the meeting.
"The mobile financial services (MFS) will be strengthened further if the ongoing SIM re-registration process completed soon," BB spokesperson Shubhankar Saha told reporters at an official briefing.
Mr. Saha, also executive director of the BB, said the cooperative societies are prohibited from doing banking business using the nomenclature 'Bank' in their operations under the existing Banking Companies Act and Cooperative Act.
Talking to the FE, another BB official said the government earlier amended both the Banking Companies Act and the Cooperatives Act to plug the loopholes, which are being used by a section of cooperative societies for doing illegal banking business across the country.
Under the rules and regulations, no cooperative society will be allowed to collect deposits or extend loans from and to members of the public or organisations other than its members.
The central banker also said the BB is committed to providing policy support, if necessary, for bringing dynamism in the country's bond market.
Currently, the central bank is maintaining close contact with the Ambassador to the Philippines, Major-General (retd) John Gomes, for getting up-to-date information about the money-recovery process taken by the Philippine authorities concerned.
The cyber fraud took place on the night of February 4, sending a total of 35 transfer orders into the US Federal Reserve Bank in New York where the central bank maintains a foreign-exchange account.
Nearly $20 million of the $101 million siphoned off was recovered from Sri Lanka. The lion's share of the booty landed in the Philippines and that is reported to have been splurged on gaming stakes in casinos.   
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