Two local banks, Social Islami Bank Ltd and Islami Bank Bangladesh Ltd, whose name came up in a US panel probe report on HSBC, yesterday clarified their stance over terror-financing.
SIBL in a statement claimed that it was not linked with any terrorist financing.
“We want to clearly state that SIBL has nothing to do with any allegations of militancy. We also want to ensure that the bank fully complies with Bangladesh Bank’s anti-money laundering guidelines in all its activities in all stages,” said the statement.
“Besides, the bank has incorporated all international standard regulations in its KYC [Know Your Customer]. SIBL is committed to following all policies and regulations of the authorities and the regulators.”
The statement comes a day after SIBL and Islami Bank Bangladesh Ltd drew huge attention for their alleged links to terrorist financing following a US Senate committee report that exposed British bank HSBC’s failure to control flows of suspect funds.
The Islamic International Relief Organisation (IIRO), a Saudi NGO, and Lajnat al-Birr Al Islam bought shares in SIBL at the time of its inception in 1995.
Following the 9/11 attacks on the US, the Office of Foreign Assets Control of the USA and the UN counter-terrorism body put the two organisations on a suspect list.
SIBL yesterday claimed that it did not make any transactions with them “from the very beginning”.
In 2006, Bangladesh Bank instructed SIBL not to issue any bonus, rights share or cash dividends against the shares owned by the IIRO until further notice.
“There were no financial or any other transactions with the two organisations even before the central bank issued the instructions,” said SIBL, a private commercial bank.
The central bank, however, withdrew the suspension in 2010, allowing SIBL to issue bonus, rights share or cash dividends to the IIRO.
The bank had not made any other transactions with the IIRO except “on that occasion”, according to the SIBL statement.
“The SIBL has repeatedly been pressing the IIRO and Lajnat al-Birr Al Islam to sell their shares. A legal process is underway to settle the issue,” said SIBL.
“We hope everybody will understand through this explanation that the SIBL had no links with the IIRO and Lajnat al-Birr Al Islam in the past, no links are there now and there will be none in the future.”
Meanwhile, Islami Bank Bangladesh Ltd said the news published in the media over the last couple of days involving the bank was misleading and not objective.
In its statement, the bank said the US senate report did not raise any accusation about Islami Bank’s involvement in terrorist financing or illegal transaction. Besides, the report did not identify any of the bank’s transactions with correspondent banks, including those with HSBC, as suspicious.
The bank said like other banks its foreign exchange business is export-import and remittance related. “Our every transaction is transparent and is reported to the central banks,” said the statement.
Islami Bank also refuted the claims made in the US senate report, and said Al Rajhi Bank was not a sponsor or shareholder of the bank.
It said the claim made in a section of local newspaper that Islami Bank had financed militant activities was not true. “Various regulators, including the Bangladesh Bank, regularly monitor our activities and so far did not find any evidence to prove such claims.”
The bank said JMB chief Abdur Rahman and his second-in-command Siddiqul Islam alias Bangla Bhai had never had accounts with it. This claim is contrary to the US senate report.
It also said the information that Islami Bank was fined for terror-financing by the central bank was not true.
“In 2006, the Bangladesh Bank fined Islami Bank Bangladesh along with some other banks for their delay in reporting suspected transaction, which is now a settled issue,” said the statement.
“Islami Bank Bangladesh Ltd has never terror-financed any individual or organisation. It is baseless. There is no point for public welfare-oriented commercial banks like Islami Bank Bangladesh to engage in anti-Islamic, anti-state, hateful, immoral and subversive acts like terror financing,” it said.