Vol. 5 Num 1022 Tue. April 17, 2007  
Front Page

BB starts probe into $75 lakh LC fraud

The Bangladesh Bank (BB) has initiated investigation into the allegations of smuggling out $75 lakh by opening letters of credit (LC) with different banks under the guise of importing essential commodities from India.

Customs officials said the huge amount of dollars was smuggled abroad between 1995 and 2006 while most cases of dollar smuggling occurred between 2000 and 2006.

Following the allegation, the government has ordered the banks not to open LCs for 346 export-import firms in Rangpur, Bogra, Naogaon, Jaypurhat and Nilphamari.

Three teams were tasked with the investigation in Bogra as hundreds of bills of entry were not submitted against LCs opened with different banks for importing various goods from India, said a Bangladesh Bank official in Bogra.

BB in a primary investigation found nearly four hundred cases out of around 1,000 allegations when bills of entry against opened LCs were not submitted.

BB sources said that investigation would be conducted initially in the banks that already opened such LCs. If gross anomalies are found, further investigation would be conducted at all 41 banks in the area that are authorised to open LCs.

Bills of entry against 27 LCs worth $18.99 lakh opened with Marcantile Bank in Naogaon from 2001to 2006 have not been submitted yet. Bills of entry against $11.9 lakh worth of LC for import of rice, lentil and other commodities by one of the export-import firms in Naogaon, Rituraj Enterprise, were not submitted, said the sources.

In Bogra, bills of entry against 54 LCs worth $17 lakh opened with City Bank Bogra branch from 2005 till 2006 were not found. The bill of entry against an LC for $9.08 lakh opened by Sarkar Flour and Rice Mill in Bogra was not found either.