Small banks in trouble for higher dollar rate

Unhealthy competition is present in the banking industry as some banks—particularly the larger ones—offer better dollar rates for remittances, placing smaller banks at a disadvantage. It is currently believed that the dollar trade is monopolized by just four or five large private banks.

State-owned banks mostly use dollars for government imports. However, the government does not pay higher than the official rates. So these banks are unable to buy dollars at higher prices, unlike the private ones.

Despite various measures by the authorities, the dollar crisis persists in the country. After the Association of Bankers Bangladesh and the Bangladesh Foreign Exchange Dealers’ Association fixed the dollar exchange rate last year, the market became chaotic.

Former lead economist at the World Bank’s Dhaka office Zahid Hussain told the Daily Sun all small and big banks would be able to buy or sell dollars as per their requirements if the exchange rate is left to the market.