Sonali Bank to have new entity in UK as existing one faces closure

A new entity of the Sonali Bank Ltd will be set up in the United Kingdom as the existing one will be shut in August next being ordered by the Bank of England, officials said.
The new body will be named as Sonali Bangladesh (UK) Ltd by abolishing the existing Sonali Bank (UK) Ltd to continue providing LC (letter of credit) advising, confirmation, and discounting services in international business of Bangladeshi commercial banks.
The Financial Institutions Division (FID) under the Ministry of Finance this week ordered this after getting approval from the government high-ups, taking into consideration the present situation of the Sonali Bank (UK) Ltd, the officials added.
The FID also said the present board of directors of the Sonali Bank (UK) Ltd would perform the similar responsibility for the new entity.
Also, Sonali Bank has been asked to establish a separate authorised payment institution namely Sonali Pay (UK) Ltd to continue remittance service for Bangladeshi community in the UK, having a paid-up capital of one million British Pound Sterling. The Sonali Bank Ltd will pay the paid-up capital.
Chairman of the Sonali Bank Ltd will also head the four-member board of directors of the Sonali Pay (UK) Ltd.
The Bank of England fined Sonali Bank (UK) Ltd and its then chief executive officer on various charges including non-compliance with the laws back in 2016.
Since then, its banking activities remained suspended but the activities like LC advising, confirmation, discounting services, and sending remittance continued.
On January 27 this year, the prudential regulatory authority and the financial conduct authority of the Bank of England decided that the Sonali Bank (UK) Ltd would not be able to continue operations in the UK.
The Sonali Bank (UK) Ltd was informed the decision on February 10 and later its Chairman Asadul Islam proposed the FID that a new entity namely Sonali Bangladesh (UK) Ltd could be formed to continue banking services in the UK.
Sonali Bank (UK) Ltd was formed back in 2001 with 51 per cent ownership of the finance ministry and 49 per cent by the Sonali Bank Ltd.

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