The Bangladesh Bank has led 27 banks to justify why they permitted 71 credit card users to spend more than $12,000 each, which is the banking regulator’s annual limit for card-based USD transactions abroad. It sought explanation in this regard from managing directors and Chief Executive Officers of those lenders in multiple phases in August 2022. The article is about 27 Banks Asked to Clarify Credit Card Rule Violation.
Executive Director of Bangladesh Bank, Md Serajul Islam, said, “The central bank discovered that 71 credit card users of 27 banks transacted US dollars well over the annual limit. After Bangladesh Bank inspection teams saw such irregularities, we sought explanations from the MDs and CEOs of those lenders about this violation.”
Mr. Serajul, however, refused to name the banks that had permitted violating the credit card transaction limit. Moreover, BB inspection teams’ findings show those 71 credit card users spent up to $20,000 each on their cards outside the country. Amid the forex crisis, the Bangladesh Bank began conducting inspections at banks in July and encountered number ones taking advantage of the volatility in the foreign exchange market to create abnormal amounts of profit.
Later, on August 8, 2022, the Bangladesh Bank ordered six banks to transfer their treasury heads to human resources departments over their role in the country’s foreign exchange market volatility. The central bank also sought explanations from the Managing Directors of six private banks, like Dutch-Bangla Bank, City Bank, Prime Bank, Southeast Bank, BRAC Bank, and Standard Chartered Bangladesh.
The banking regulator took such initiatives when the country’s foreign exchange reserves were decreasing daily due to the growing import payments triggered by a supply chain disruption, a ripple effect of the Russia-Ukraine war. As a result, the forex budget stood at $38.91 billion, down by around $9 billion compared year-on-year, as per the latest data from the Bangladesh Bank. Central bank officials said that importers are paying banks up to Tk. 109 – Tk. 110 per USD, whereas banks are buying it for Tk. 95.
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