In a letter, the BB also asked the Bangladesh High Commission in London to closely watch activities of the remittance houses there having transactions with Bangladesh and notify the central bank of any fraudulent activities by such houses.

Asked about the additional risk measures, a BB official said, "We asked the local banks to evaluate the reputation and accounting systems of the UK-based money exchange houses before signing any deal with them."

The BB directives came after London-based First Solution Money Transfer Ltd stopped business on June 27 and applied to the authorities there to declare it bankrupt, which created panic among clients both in London and Bangladesh. Owners of the agency immediately went into hiding.

The First Solution owes up to £2 million to some 2,000 creditors who had been sending money to Bangladesh from London.

The BB sent an inspection team to London last year to investigate activities of the London-based money transfer agencies that have transaction with Bangladesh. The team found that a number of agencies unlawfully publicised that they have BB approval.

The BB letter also asked the commercial banks to ask their money exchange partners in different countries not to use the central bank logo in advertisements or official papers since they are not authorised by the BB.

The central bank said many money transfer agencies are claiming to their clients that they have approval from Bangladesh Bank, which is totally untrue.

The BB letter said it is not necessary in the UK to take any financial regulatory body's approval for money transfer business. "It is possible to do remittance transfer business in the UK by registering with the HM Customs and Excise, UK," it said.

There is no system of inspection and monitoring on the money exchange houses in the UK, the letter said, adding, "Thus, there is high risk for any bank to do money transfer business with such remittance houses."