Although six banks have already been punished for making unusual profits from forex transactions, several other banks out of the purview of Bangladesh Bank have been making crores by overcharging when selling dollars.
The six banks punished earlier were Dutch Bangla Bank, Southeast Bank, Prime Bank, City Bank, Brac Bank and Standard Chartered Bank.
But the profit margin and percentage statistics, only from dollar transactions, of six other banks in the first six months of this year show that others were also making big profits.
Bangladesh Bank's recent data showed that 12 banks exploited the condition as dollar prices kept rising to as high as Tk120 recently, making a profit of Tk1427 crore more, compared to the same period of the last calendar year, which was only Tk465 crore.
According to an analysis, Bank Asia earned Tk177 crore from January-June period earlier this year, followed by Prime Bank in second position with a whopping 504% year-on-year growth from last year, or Tk126 crore growth in income only by selling dollars.
This was followed by NCC Bank with a 500% growth, from Tk20 crore in H1'2021 to Tk120 crore in H1'2022, Brac Bank with 417% growth from Tk18 crore to Tk93 crore, Dutch Bangla Bank with 403% growth from Tk29 crore to Tk146 crore, Dhaka Bank with 353% growth from Tk30 crore to Tk136 crore.
City Bank with 340% growth from Tk40 crore to Tk176 crore, Mercantile Bank with 245% growth from Tk49 crore to Tk169 crore, Shahjalal Islami Bank with 234% growth from Tk41 crore to Tk137 crore.
United Commercial Bank with 205% growth from Tk66 crore to Tk201 crore, Eastern Bank with 159% growth from Tk27 crore to Tk70 crore and Islami Bank Bangladesh with 140% growth from Tk 97 crore to Tk233 crore.
Bank Asia tops the list here. Their profits from foreign exchange transactions were Tk177 crore more than the previous year.
From January to June 2021 Bank Asia's profit from forex transactions was only Tk23 crore, which shot up to Tk200 crore in January-June period of this year.
The bank witnessed a phenomenal 770% YoY growth as a result.
Regarding the matter Bangladesh Bank spokesperson and Executive Director Md Serajul Islam said they will inspect foreign exchange dealings of all banks and will take action if they find any unusual profits.
“Letters have been sent to the managing directors of six banks seeking an explanation regarding the excess profit in dollars. For now, letters have been given to these six banks. Letters will also be given to other banks in phases. Besides, every bank will be inspected, because many other banks have done the same,” he told Dhaka Tribune.
“Action will be taken against the banks found guilty of irregularities,” he warned.
Former governor Salehuddin Ahmed thinks that banks got the opportunity to make such unusual profits due to the negligence of the central bank.
“Banks would never have been able to make such extraordinary profits without the central bank's negligence. To improve the overall situation including dollar manipulation, the central bank should increase its monitoring of financial institutions along with reducing imports,” he added.
According to Dhaka Tribune data analysis, this year so far in interbank transactions Bangladesh Bank officially devalued the Taka at least 20 times. 16 times during January 1 to June 30, 2022.
On August 17, Bangladesh Bank sent show-cause notices to managing directors (MD) of six banks for allegedly profiting more from selling US dollars.
They have been asked to explain ten issues about their dollar transactions, including unusual profits, and high spread between buying and selling costs.
They were also asked to reply in seven working days.
Earlier, on August 8, the central bank asked six banks to remove their treasury heads on the grounds of making aggressive exchange gains that intensified the dollar crisis in the market, fuelling inflation.
In both of Bangladesh Bank’s lists, the six banks were Dutch Bangla Bank, Southeast Bank, Prime Bank, City Bank, Brac Bank and Standard Chartered Bank.
