Banks warned against buying dollars at inflated rates

The Bangladesh Bank has verbally cautioned several commercial banks against purchasing US dollars at elevated rates in a move to maintain stability in the foreign exchange market.

The matter was discussed during a meeting between the central bank governor, Md Mostaqur Rahman, and the Association of Bankers Bangladesh (ABB) held in the capital yesterday (9 April).

A senior Bangladesh Bank official told TBS that the regulator had observed that some banks were purchasing dollars at excessive rates. "As a result, banks have been instructed to refrain from buying or selling dollars at inflated prices."

He added that the exchange rate would be determined by supply and demand, with no direct intervention by the central bank.

According to the official, the current supply of dollars remains strong, while banks are also maintaining a healthy net open position. In such a situation, purchasing dollars at higher rates could destabilise the market, prompting the central bank to advise strict compliance.

A senior official of a private bank said the Bangladesh Bank instructed banks to purchase remittance dollars from money exchange houses within Tk123.10. It also directed that interbank transactions should not exceed Tk122.75.

However, officials at several banks told this newspaper yesterday that they had purchased remittance dollars at Tk123 from exchange houses.

Bankers noted that interbank dollar transactions have declined over the past two days following the central bank's instruction to cap the rate at Tk122.75.

They explained that banks are reluctant to sell dollars at Tk122.75 in the interbank market after purchasing remittance at higher rates, which has contributed to reduced trading activity.

ABB seeks relaxation on bonus rules

During the meeting with the governor, the ABB called for a revision of a December 2025 circular that prohibits banks with capital or provision deficits from granting incentive bonuses to their employees. Bank representatives argued for a move away from this rule to ensure staff remained motivated.

According to a senior official, the governor expressed a willingness to consider a new circular. This could potentially allow banks with capital shortfalls to provide bonuses, provided they at least maintain their required provision levels.

Furthermore, the ABB demanded the removal of the current Tk15 lakh ceiling on annual bonuses for bank managing directors. Existing regulations mandate that an MD's bonus cannot exceed this limit and that no other bank official can receive a higher bonus than the MD.

ABB Chairman Mashrur Arefin said the association also proposed raising the personal loan limit from Tk20 lakh to Tk40 lakh.

In addition, a proposal was made to allow banks to provide up to 90% financing for the purchase of hybrid vehicles.