Money changers must report real-time transactions to BB

Central bank to introduce software to check money laundering
Bangladesh Bank is going to take strict regulations for currency exchange firms from this month to check money laundering, said officials of the central bank.
The BB will introduce a software in this regard and will initially operate it on test-run basis by this month. After the successful test-run, the central bank has planned to run it early next year.
The money exchange firms will have to issue receipts to the clients by using the central bank’s software in which a transaction code number will be attached.
The central bank will make it mandatory for money exchange firms to provide the clients with receipts when they will purchase or sell any foreign currency, a BB official told New Age on Monday.
The BB will issue a circular to all money exchangers in this regard in one or two weeks, he said.
Under the process, a client, who holds any type of foreign currency, will have to show the receipt against his or her currency to the law enforcement agencies, if required, the official said.
The foreign currency will be treated as illegal, if the currency holder fails to show the receipt, he said.
The BB has created new software for money exchange firms named ‘money changers monitoring system’ in which the currency exchangers will have to deliver data on real-time basis against their all kinds of transaction, the official said.
The money exchange firms are now submitting their transaction record manually on monthly basis to the BB through their respective authorised dealer branches of scheduled banks.
Some money exchangers, on most occasions, endorse the dollar on the clients’ passports even without the sales being conducted, he said.
The law enforcement agencies will be able to verify the code number provided with the clients’ receipts to ensure the legality of the foreign exchange holding by the clients, the official said.
As part of the move, the BB will organise a training session with the representatives of the money exchange firms by this month to train them up on how to comply with the new central bank’s directives.
The official said the central bank had earlier given licences to more than 600 firms to operate money exchange firms across the country, but it had to cancel a huge number of licences in the last few years on charge of their irregularities.
According to the BB data, around 330 money exchange firms are now operating their business in the country, of which 172 are located in the capital.
As per the central bank regulation, a money exchange firm located in the Dhaka city has to transact at least $5 lakh in a year while other money exchange firms must transact at least $3.50 lakh annually.
The BB official said majority number of money exchange firms usually made transaction more than $5 lakh annually but they recorded little in their books to avoid tax, which eventually save the money launderers.
Another BB official said that the central bank would be able to control the price of foreign currency in the curb market when it would implement the new measures.
He said the greenback which enters the country illegally from other countries could be traced easily if the money exchange firms were brought under full control by the BB.
The foreign currency transaction by showing the passport is not transparent now due to absent of a proper scrutinising system in this regard, he said.
A Bangladeshi citizen can receive $7,000 to travel abroad from the banks and money exchange firms while he or she can receive $5,000 to travel in the SAARC countries in a calendar year.
Some persons receive the foreign currencies by showing fake passport and they push the amount into the curb market in order to take higher price than the bank rate, the official said.
For this reason, the central bank is now taking passport number of the citizens from the banks and money exchange firms to strengthen its monitoring system, he said.
Source: New Age