Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has decided to start special inspection to verify reporting, holding and utilization of foreign exchange by commercial banks, officials said on Saturday.

“Our probe teams will start their investigation from Sunday,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told the BBN, adding that the BB will take drastic action against the defaulting banks after receiving the inspection reports.

The central bank has taken the latest measure against the backdrop of alleged ‘foul play’ committed by some commercial banks, which had resulted in volatility in the country’s foreign exchange (forex) market recently.

The BB official also said the probe teams will investigate into different aspects of foreign exchange dealings in line with the existing foreign exchange rules and regulations.

Besides, the inspection teams will examine the latest reports on foreign exchange dealing of both inter-bank foreign exchange market and corporate deals, submitted by the commercial banks.

“The inspectors will also check the exchange rates of the US dollar, offered by the commercial banks, for receiving remittance from overseas exchange houses considering the local market situation,” the BB official said.

“The central bank is trying to trace unreported funds held by the commercial banks by using different techniques,” another BB official said, adding the teams will also examine the overall outflow, inflow and swap deals of the banks.

During the inspection, the teams will check the overseas accounts maintained by local banks with foreign banks, generally known as NOSTRO accounts, to know the actual foreign exchange position, the BB official added.

The Bangladesh Taka (BDT) has been under pressure, leading to its depreciation in recent days against the US dollar, mainly due to higher demand for the greenback for settlement of outstanding import letters of credit (LCs).

BBN/SSR/AD-11Dec11-2:25 am (BST)