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Bangladesh authorities to probe HSBC transactions

Publication Date : 19-07-2012


The central bank of Bangladesh will probe whether HSBC's Bangladesh unit was involved in any suspicious transactions, a top official said, a day after a US panel exposed the British bank's failure to control flows of suspect funds.

Certain allegations have been raised against HSBC and two Islamic banks in Bangladesh.

"We are probing those. Action will be taken if necessary," Bangladesh Bank Deputy Governor S.K. Sur Chowdhury told reporters at the BB headquarters yesterday.

He had earlier announced the half-yearly monetary policy for the current fiscal year.

Chowdhury said the allegations raised against the local banks involved events between 2005 and 2007, and the central bank had taken necessary steps at that time.

BB Governor Atiur Rahman said the US senate report had mentioned the actions the BB had taken at that time. The anti-money laundering law is now much stricter in Bangladesh, and the central bank is alert so that such wrongdoings do not recur.

Referring to the two Islamic banks, the BB governor said, "We have been going through the report. Action will be taken if required."

Islami Bank Bangladesh Ltd and Social Islami Bank Ltd came into the spotlight on Tuesday for their alleged links to terrorist financing after a US Senate report exposed HSBC's internal governance failure to control flows of suspect funds.

One of the banks was allegedly funding al-Qaeda, and Osama bin Laden's brother-in-law held shares in a company that has shares in the bank.

A report of the US Senate Permanent Subcommittee on Investigations, a congressional watchdog panel, revealed the troubling information.

The bank acted as financier to clients seeking to route shadowy funds from the world's most dangerous and secretive corners, including Mexico, Iran, Saudi Arabia and Syria, according to the report.

HSBC apologised to the US Senate, saying it takes "compliance with the law, wherever it operates, very seriously".


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