Gross irregularities in opening LCs : BB

Staff Reporter :
Bangladesh Bank has found gross irregularities of siphoning off money through under invoicing or over invoicing while opening letter of credits (LCs) for import and export of different items.
Bangladesh Bank Governor Abdur Rouf Talukder said that money was smuggled out of the country by tempering LCs, showing low rate against high rated items and the rest of the money was sent through Hundi.
He said this while unveiling the import reports of the last several months in an inaugural ceremony of Bangladesh Institute of Development Studies (BIDS) in a city hotel on Thursday. Planning Minister MA Mannan was present as the Chief Guest while BIDS Director General Binayak Sen presided over the event.
Citing several instances of false declaration during import, Abdur Rouf said, “An LC is opened for importing a Mercedes-Benz at 20,000 dollar when its market price is one lakh dollar. The rest of the money is sent through Hundi.” He also said that over invoicing is declared on various import items by 20 to 200 per cent. Some 200 LCs were closed last July on such ‘mysterious’ grounds.
The BB Governor said that the trade based money laundering could be stopped if check and balance was followed in import and export of foreign items.
Regarding import items, he said, “There is no ban or control on import. All can import if LCs are opened at proper price. There are some 30-35 luxury items. The excise duty on some of these items has been increased. The LC margins have also been increased.”
About the high dollar price, he said, “The exchange of foreign currency should be based on market price. So it has been left in the hands of the market. The dollar market is being stable gradually.”