IslamicFinance.de

Bangladesh’s credit rating might deteriorate as well as the LC confirmation cost would rise further. This is because two local private commercial banks Prime Bank and Dutch Bangla Bank allegedly failed to repay the loans (not more than US$2 million only) from the Islamic Corporation for Insurance of Investment and Export Credit (ICIEC). Local commercial banks are now unable to repay the loans against local and foreign LCs due to stagnated business activities amid political deadlock ahead of the general election and prolonged violence. LC confirmation cost will be increased unless the local banks maintain the standard credit rating of the commercial banks.

The Anti-Corruption Commission (ACC) of Bangladesh has filed 12 cases against 53 officials of five banks and the Bismillah Group for their alleged involvement in the embezzlement of funded loans worth over Tk9.9bn. The list of the accused included 13 people from Bismillah Group, 12 Janata Bank officials, eight Prime Bank officials, seven Premier Bank officials, five Jamuna Bank officials and eight Shahjalal Islami Bank officials. According to the probe report, Bismillah Group, in association with the bank officials, embezzled the money through loans against trust receipts using names of fake foreign buyers. They secured cash incentives against fake export documents, taking advantage of inland bills purchases and overpricing non-existing export items. The inquiry also found that the group laundered money abroad.