BB rejects City request to set up subsidiary in HK | The Daily Star
12:00 AM, October 04, 2017 / LAST MODIFIED: 12:44 AM, October 04, 2017

BB rejects City request to set up subsidiary in HK

Bangladesh Bank has declined to give City Bank the permission to set up a subsidiary company in Hong Kong given the declining imports from the Asian nation.

The private bank in its application in October last year said it would provide trade financing amongst other services to its clients.

It also requested the central bank to allow it to transfer HKD 6.16 million (equivalent to Tk 6.46 crore) to Hong Kong for setting up the company, to be named City Overseas Finance.

Upon receiving City's application, the central bank made an assessment to see whether the proposed venture would be viable or not.

The BB report found that Bangladesh's import from Hong Kong has been on the descent for the last one decade.

Bangladesh imported goods worth $805.10 million from Hong Kong in fiscal 2015-16, down from $852.20 million a year earlier, according to data from the BB.

Rather, local importers took their commissions to China, India, Malaysia, Singapore, Japan, South Korea and Indonesia.

Hong Kong secured the 10th position among the top importing countries for Bangladesh, down from the fourth in the 1990s.

For instance, electronics was one of the major items imported from Hong Kong over the years and its shipment into Bangladesh from the island nation declined last fiscal year.

The central bank earlier allowed AB Bank, Eastern Bank and Prime Bank to set up finance companies in Hong Kong considering the volume of international business between the two countries.

Prime Bank set up its subsidiary company in Hong Kong in 2006, Eastern Bank in 2013 and AB Bank in 1995.

Under the circumstances, there is no need to allow any local bank to expand its overseas banking operations in Hong Kong, according to the BB report.

“The Hong Kong market is deep and wide enough to accommodate a forth Bangladeshi bank to open an office there,” said Mashrur Arefin, additional managing director and chief communications officer of City Bank.

The bank will soon approach the BB governor to reconsider its application, he added.

 

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