BB cancels over 400 licences of money exchangers in a decade

Badrul Ahsan | Published: February 25, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The Bangladesh Bank (BB) has cancelled more than 400 licences of money exchangers in a decade allegedly due to their involvement in many undue activities under the licence, officials at the central bank said.
According to them, some of these money exchange houses were found involved with money laundering, some could not fulfil their yearly currency handling targets and some others were accused of handling illegal foreign currencies.
Besides, many were also found doing business through opening branches in different cities across the country under one licence defying government's embargo on doing so.
The money exchange policy of the government has barred the licence holders from opening any branches under one licence and also set a target to handle at least US$.5.0 million worth of foreign currencies a year.
But many of the licence holders have been found to be doing business through opening branches along with a set of allegations of misusing the rules of the money exchange policy.
"We have found different types of irregularities of money exchange business which forced us to cancel the licences," a high official at the BB told the FE preferring anonymity.
"According to information we have, many money changers are still involved in various types of irregularities which is tough to prove. When we would be able to prove the anomalies, we would cancel licences of those along with taking other legal actions," he added.
The BB official, however, informed that there are an adequate number of foreign exchange branches of banks in the country now to handle foreign currencies for which cancellation of the licences will not leave any negative impact on the foreign currency exchange market.
The then government of 1997 to 1999 period issued some 650 money exchange licences with a view to keeping foreign currency inflow intact and making its local trading easy in absence of adequate foreign exchange branches of scheduled banks in the country.
There were around 500 foreign exchange branches of local banks across the country when the licences were issued, which now stood at 932.
At present 237 money changers are in operation in the country.
However, many customers alleged that bankers do not provide proper support when they go to purchase foreign currencies.
They said the banks usually do not handle more than three to four currencies which cannot meet customers' demand.
"Rates of currencies in banks are better than those of private operators but the dealings of the banks are not up to the mark which forces us to go to the private operators," Sabina Yeasmin, a customer, told the FE.
However, a section of money exchange licence holders accused the BB authorities of harassing them for silly mistakes.
"Keeping copy of passport and tickets against each transaction is really tough which BB officials do not want to consider. They cancel licence even for such cases," a money exchange licence holder said preferring not to be named.
He said banks would not be able to provide the kind of support that the money exchangers give.
"Money exchange houses transact even at night and on holidays which is not possible for the banks. So necessity for such private operators cannot be denied," he added.