The Bangladesh Bank (BB) has advised the country's commercial banks that decisions whether to open letters of credit (L/Cs) for the businesses of people facing criminal charges should not be unduly influenced by the prospect of legal action.

The central bank is concerned that the country's commercial banking services should not disrupt the operations of a business simply because the owner of the business stands accused of corruption, tax evasion or other offences.

Objectivity

A BB circular says, "with regard to loan classification, new loan issuance and opening of L/Cs, banks should consider criminal cases objectively, not subjectively."

It adds that business entities should be treated separately from people in terms of banking activities and financial institutions should continue relations with customers irrespective of charges against the business owners.

Negative impacts

The circular says there are reports of organisations with owners charged with criminal offences facing difficulties with banking transactions that are having an adverse impact on business activities.

The central bank goes on to explain that such circumstances could lead to job losses in businesses owned by people facing criminal charges or short supply of products in some markets.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.