DHAKA: Bangladesh Bank governor Dr. Atiur Rahman said the central bank would take legal action against Islami Bank Bangladesh Ltd and Social Islami Bank for allegedly taking suspicious funds’ supply from HSBC Bank USA.
The governor came up with the information while announcing the monetary policy for fiscal 2012-13 at a press meet on Wednesday.
While replying to journalists, he said, “The central bank is aware of the matter. We will be careful that such incident may not happen again.”
On the other hand, BB deputy governor SK Sur Chowdhury said, “The allegations against these two Banks are not new. We have taken step against such issues earlier and the process will be continued in future.”
“Two new acts have been implemented to prevent money laundering. We will take legal steps if necessary”, he added.
Earlier, a scathing US Senate report, issued on Monday, revealed that HSBC Bank USA supplied US dollars to Islami Bank Bangladesh Ltd and Social Islami Bank, despite evidence of linking to terrorist financing.
A “pervasively polluted” culture at HSBC allowed the banks to act as financier to clients seeking to route shadowy funds from the world’s most dangerous and secretive corners, including Bangladesh, Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria.
Each of these specific cases shows how a global bank can pressure its US affiliate to provide banks in countries at high risk of terrorist financing with access to US dollars and the US financial system.
The Senate report also claims significant sums of Mexican drug money almost certainly passed through HSBC.
It also alleges that suspicious funds from Syria, the Cayman Islands, Iran and Saudi Arabia also passed through the bank.
On the subject of ‘Disregarding Links to Terrorism’ the report said, “For decades, HSBC has been one of the most active global banks in the Middle East, Asia, and Africa, despite being aware of the terrorist financing risks in those regions.”
It added: “In particular, HSBC has been active in Saudi Arabia, conducting substantial banking activities through affiliates as well as doing business with Saudi Arabia’s largest private financial institution, Al Rajhi Bank.”
The report claims evidence of links between Al Rajhi Bank and financing organisations associated with terrorism but does admit, “Al Rajhi Bank has repeatedly condemned terrorism and denied any role in financing extremists. In addition, despite all the allegations, neither the bank nor its owners have ever been charged in any country with financing terrorism or providing material support to terrorists.”
While in response HSBC issued a statement on 16 July that reads: “HSBC takes compliance with the law, wherever it operates, very seriously. We will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect.
“We will apologise, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong.”
BDST: 1442 HRS, JUL 18, 2012
Edited by: Maria Salam, Asst Output Editor
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