Agrani spurns BB, keeps open Canada exchange house
Agrani Bank has kept open a thoroughly loss-making exchange house in Canada for the last one and half years by defying Bangladesh Bank orders.
On June 14 last year, BB gave its nod to the state-owned bank to shutter the exchange house, Agrani Remittance House Canada Inc, and later even permitted Agrani to remit CAD 1 lakh (equivalent to Tk 64.48 lakh) to wrap up the operations.
But Agrani went back on its decision later and subsequently requested the central bank on November last year to allow it to run the exchange house for another year. The request was suitably shot down.
BB instead instructed the bank to shutter the exchange house at the earliest as there is no chance of the outlet ever turning up in the black. The exchange house was set up in May 2014 and until November this year has yielded Agrani net losses amounting to Tk 2.33 crore.
Agrani though disregarded the BB directive: last month its Chairman Zaid Bakht and Managing Director Mohammad Shams-Ul Islam went to Canada to inspect the exchange house in a trip that cost Tk 16.38 lakh, according to the bank's board minutes.
The trip was retroactively approved by the bank's board -- a punishable offence as per the Banking Company Act.
This prompted the central bank to slap Agrani with a show-cause notice on November 21, in which it was asked to explain why punitive measures should not be taken for charges of violation of BB instructions.
In its reply, Agrani argued that it was running the operations of the exchange house in line with the directives of the government high-ups.
The government high-ups and the Bangladesh High Commissioner in Canada have instructed Agrani not to shutter the exchange house as it was now carrying the country's national flag in the foreign country, Bakht told The Daily Star yesterday.
"We have already taken austerity measures with the view to turning the outlet profitable one," he said, adding that the inflow of remittance from Canada will decline if the exchange house is shuttered.
But BB officials said there is no scope of allowing Agrani to continue to run the exchange house as the bank had already remitted money to Canada in the name of closing down the outlet. Besides, a number of local banks have recently inked drawing arrangement with foreign banks to bring remittance from Canada, they said.
"So, the closure of the exchange house would not have any adverse impact on the country's inflow of remittance from Canada," said one of the BB officials upon conditions of anonymity due to sensitivity of the matter.
Agrani has so far sent Tk 5.48 crore to Canada to operate the exchange house despite the outlet never turning in any profit, according to data from the state bank.