EBL's Diners Club cards face setback

The launch of Diners Club credit cards in Bangladesh hit a rough patch after the High Court stayed the implementation of the US company's deal with Eastern Bank Ltd.
The ruling from the bench of Justice Salma Masud Chowdhury and Justice Md Habibul Gani came on Monday following a writ petition filed by Travel Consultants, a local travel agent.
Travel Consultants has accused EBL of taking away the business it has been doing for three decades with Diners Club International (Hong Kong), the regional unit of Diners Club International (DCI) owned by US-based Discover Financial Services.    
EBL, one of the respondents to the court rule, has denied any wrongdoing.
Travel Consultants said it has been the sole agent of DCI in Bangladesh since May 1985.
Since then, the travel agency has been serving foreigners with Diners Club credit cards during their stays in Bangladesh, earning up to $1 million of foreign currencies a year in the process.  
Travel Consultants paid all the local bills of the travellers against their DCI credit cards. Later, DCI reimbursed the travel agent.
Travel Consultants continued to receive payments through its account with Standard Chartered Bank before it shifted its account to EBL in April last year.
"Looking at business prospects, EBL entered into an agreement with DCI bypassing the local sole agent and is thereby trying most unethically to usurp the business of Travel Consultants," SA Reza Hussain, chief executive and proprietor of Travel Consultants, said in a statement.
The stay order will remain in force until it is vacated, Barrister Akhtar Imam, a senior advocate of the Supreme Court who stood for Hussain, told The Daily Star.
In December 2012, EBL signed a deal with DCI to become a card issuer and acquirer.

The bank officially launched the cards on May 14 this year, said Ziaul Karim, head of brand and communication of EBL, adding that the bank has not issued cards yet.
Following the deal, Hussain of Travel Consultants approached the central bank for action. Getting no response from Bangladesh Bank, his lawyers filed the writ petition.
Bangladesh Bank, the chairman and the managing director of EBL, and secretary of the bank and financial institutions division of the finance ministry have also been made respondents to the rule.  
The judges also directed the central bank to stop the implementation of the agreement between the local bank and DCI.
Ziaul Karim of EBL said: "There is no question of taking away business from anybody.
DCI has signed a non-exclusive agreement with EBL, meaning the US company can sign deals with other banks as well to allow them to issue its cards and run its acquiring business, he said.
"It is up to the DCI to choose partners. We are doing business within the capacity of a bank. We did nothing wrong.”
Meanwhile, DCI Hong Kong has sent a notice expressing its intention not to renew its agreement with Travel Consultants.
DCI did not return an email sent by The Daily Star.