Bangladesh Bank (BB) has asked 13 bank general managers to explain why they offer unusual US dollar rates when collecting money from money exchangers.

The banks are: BRAC Bank, Islami Bank Bangladesh, Shahjalal Islami Bank, Jamuna Bank, Trust Bank, Rupali Bank, Eastern Bank, Janata Bank, United Commercial Bank, NCC Bank, Mercantile Bank, City Bank and Al-Arafah Islami Bank.

In this regard, the banking regulator issued a letter on December 19 and asked banks to respond by December 22.

Action will be taken if a bank fails to provide a satisfactory explanation, central bank officials said.

Some banks said they had submitted their explanations to the Bangladesh Bank today.

However, Bangladesh Bank executive director and spokesperson Husne Ara Shikha said she was not aware of any banks that had yet submitted an explanation.

“We have sent our explanation to the central bank today and will follow regulatory instructions in case of purchasing US dollars from exchange houses,” Mirza Elias Uddin Ahmed, managing director and CEO of Jamuna Bank, told Daily Star.

There is pressure on the foreign exchange market as the flow of opening letters of credit (LC) for commodities has increased in the run-up to Ramadan, he said.

He said the bank was not receiving enough foreign currency at the current official rate.

In some cases, exchange houses are also responsible for the high rate of the US dollar, he explained.

A senior BRAC bank official told The Daily Star that his bank had also sent the explanation to the BB today.

The foreign exchange market has become unstable due to a lack of communication and coordination between banks and the regulator, he explained.

Some banks have started aggressively offering high rates to collect foreign exchange as the banking watchdog recently asked banks to clear their overdue letter of credit payments, BRAC bank official said requesting anonymity.

City Bank Treasury Department officials also informed this correspondent that they have also sent their explanations to the central bank.

The foreign exchange market became unstable this month after some banks began offering rates higher than the official rate for the U.S. dollar, another senior central bank official said.

When the official interbank exchange rate was around Tk 120 per US dollar, some banks were offering Tk 127 to Tk 128 at money changers, he added.