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Bangladesh: Import of garment machinery comes under cloud

Bangladesh Bank has launched an inquiry into the recent substantial increase in garments machinery import despite ongoing political turmoil to see whether there is any attempt to draw off money abroad through over-invoicing. The opening of LCs for import of capital machinery increased by 23 per cent in July-August period of the current fiscal year over the same period of the last fiscal year. The value of LC opened against capital machinery stood at $428 million and settlement stood at $380 million during the period as compared to $348.31 million and $334 million respectively in the corresponding period of the last year.

Bangladesh Bank senior executives suspect money laundering activities as opening of import letter of credit (LC) increased substantially during the fag end of the present government tenure. Generally, the trend is witnessed at the end of every government. They said the ill attempts are being made through over-invoicing as the imported machinery are reported as new and at higher price, but actually those would be second hand ones at lower price.

The rising trend is illogical, say experts, as the entrepreneurs remain shy of making fresh investment in this situation of political instability ahead of the upcoming general election. Earlier, Anti Corruption Commission of Bangladesh had moved to investigate the cause of significant increase in LC opening.


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