STAR BUSINESS REPORT

A money changer will be able to hold maximum cash of Tk 50 lakh per day in their vaults, said the Bangladesh Bank yesterday as it beefed up its efforts to tackle hundi.

As of yesterday, there had been no regulation dictating the amount money changers could keep under their disposal.

The new move comes after allegations that some money changers are involved in hundi, an illegal cross-border financial transaction, which has already put an adverse impact on the flow of remittance.

If a money changer keeps more than Tk 1 crore in their vault, there is a possibility that they are involved in hundi since retaining such a large amount of money makes no sense given their small business volume, a central banker explained.

As per the instruction of the central bank, a money changer can hold a maximum of $25,000, or its equivalent in other foreign currencies, at the close of each business day.

The cash foreign currency beyond this limit will either have to be encashed or deposited in the foreign currency account maintained by a money changer with banks.

The balance of the account must not exceed $50,000, or equivalent in other foreign currencies, at any point in time, said the central banker.

The latest move from the BB comes as the country’s foreign currency regime has been facing instability for several months, owing to the fast depletion of reserves amid unprecedented import costs. As a result, the price of the US dollar sprinted to Tk 120 recently in the open market.

The BB official said that money changers were also involved in the manipulation of the exchange rate.