Bangladesh Bank suspended all transactions of the Bank of Credit and Commerce International (overseas) Limited (BCCI) in Bangladesh from Saturday until further instructions.

The Instructions followed steps taken by seven countries to seize assets and shut down operations of the Bank charged with alleged money laundering. fraud and drug trafficking.

BCCI was founded in the early 1970s by Pakistani banker Agha Hasan Abedl and grew over the years. Last year, the Bank was taken over by Sheikh Zayed-bin-Sultan Al-Nahyan, Emir of the United Arab Emirates. He and his family hold 77 per cent interest in BCCI

UAE pumped one billion dollars into the Bank. But lat-

By Shahiduzzaman Khan est reports said that the Bank was reeling under increasing bad debt and other problems.

Foreign exchange dealership of the BCCI in Bangladesh was also cancelled in a separate order of the Bangladesh Bank.

When the banking hours started Saturday, clients were caught by surprise seeing Bank branches under lock and key.

'What the hell's wrong with the Bank? Why Is there no notice of closure?’ asked a customer at the head office branch of the BCCI.

He was visibly worried at newspaper reports that BCCI operations were suspended in seven countries.

There was a heavy rush of clients at the Bank gates. The number swelled with the passage of time. But Bank officials

kept them from entering saying that 'the banking operations have been closed as ordered by the authorities concerned in the public interest.’

The customers were not happy with the brief answer and many of them were found involved in heated debates with Bank employees.

Said the chairman of a business firm. 'I have come to draw mopey to pay salary to my staff but without any notice, it has closed operations. I have the right to get a satisfactory answer. But unfortunately there is nobody to explain the whole thing.'

Due to the closure of the banking operations, there were reports of heavy withdrawals from some foreign

From Page 1 Col. 4 banks operating in Dhaka.

Panic gripped the banking circle immediately after the closure of the branches of BCCI In Bangladesh.

Bangladesh Bank, in its order, said all operations of the BCCI branches have been suspended in the interest of the public until further order.

BCCI has two branches in Dhaka, one In Chittagong and one in Khulna. It operates 3 booths in Dhaka and two tn Chittagong. Customers' deposits with the Bank totalled approximately Taka 500 crore, the sources said.

According to authoritative sources. BCCI operations in Sri Lanka. Pakistan. India, Thailand and Japan were also suspended on the day but later the orders of suspension were withdrawn. Bangladesh Bank did not withdraw the order till writing this report at 9 pm Saturday.

Bangladesh Bank sources said the action was taken under the Banking Company Act, 1991.

'Such an action Is a part of normal regulatory activities in a country to protect the interests of the depositors and allow an orderly conduct of banking business in the country.’ the sources said.

Another source said in view of appointment of a receiver

for the BCCI in Cayman Islands in the West Indies. BCCI’s controlling office in Abu Dhabi Instructed Its chief executive in Bangladesh not to open bust-

On receipt of this report and also the reports from other central banks. Bangla desh Bank reviewed the situation and gave the directive to suspend the banking operations.

The central bank has also instructed the scheduled banks in the country not to make any transactions with the BCCI.

All banks have been cautioned that before entering Into any deal with the overseas branch of the BCCI. they have to ensure themselves that such branches have not been restricted from undertaking transactions by the regulatory authority in that country.

Bangladesh Bank sources said all assets and liabilities of the BCCI are now being ascertained. Auditors have also been appointed for this purpose, the sources, said.

Some banking experts, commenting on the closure of the Bank's operations In Bangladesh, said there has been no run on the Bank's customers' deposits. Wc are really surprised to hear the closure order.’ they said.

Said an executive of the Bank, public sentiment has be-

come Jittery on the suspension of the Bank operation. There will be adverse repercussions in the whole banking system

He said. 'It's Just a Bangladesh affair and Bangladesh Bank should view it from its own position.'

He said foreign exchange is strictly regulated here by Bangladesh Bank and unlike European countries, there has not been free hard currency business here. So the suspension of the banking operation cannot be Justified, he said.

Many customers of the BCCI made queries at newspaper offices on the closure of the Bank's operations till late at night on Saturday. One thing shaped up from their impas stoned queries: Are they going to get back their own deposits?’

An Informed circle told The Daily Star that non-profiting loan of the Bank is believed to be one of the highest (as compared to other foreign banks operating here) in Bangladesh.

Since its operations in Bangladesh and gradual expansion, the size of the business and staff was made broad -based but there was no major reorganisation In the Bank's management after reports of some non-banking activities by the Bank in Bangladesh.

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