Barclays cuts ties with exchange houses of 10 Bangladeshi banks

Local bankers said the move would affect their business, particularly that of sending remittances. But the banks’ nostro accounts, used to facilitate settlement of foreign exchange and trade transactions, with Barclays will not be hampered.

“Having reviewed your business against the amended eligibility criteria, I must inform you that the corporate and investment banking divisions of Barclays will no longer be able to provide services to you,” Nick Pritchard, relationship director of Barclays, said in a letter to a local private bank.

Barclays had initially set July 10 as the date for terminating business ties with the exchange houses. The deadline was later extended by a month to give the banks time to make arrangements with alternative banks.

“The decision has put us in a difficult situation,” said Helal Ahmed Chowdhury, managing director and chief executive officer of Pubali Bank.

The corporate and investment banking divisions of Barclays have recently undertaken a review of money services it offers to business clients and accordingly, has amended its acceptance and eligibility criteria across the sector.

After reviewing the business of the exchange houses, Barclays decided in May to discontinue services to these houses, which it said do not fall under the amended eligibility criteria.

“Barclays has decided to close business with 250 exchange houses across the world, including 10 in Bangladesh,” said Nurul Amin, managing director and CEO of NCC Bank.

Amin, however, is happy that the British bank has given them one month time to get the services from other banks.

A dozen of Bangladeshi banks have opened their exchange houses in the UK in the past few years to help Bangladeshi expatriates send money home. These exchange houses are fully owned subsidiaries of the local banks, which have invested a good sum to set up infrastructure and hire people.

“We are ready to comply with more stringent policies to be set by Barclays,” said Chowdhury of Pubali Bank, adding that the closure of business ties would facilitate remittance flow through informal channels.

He said his bank is frantically trying to open accounts with other banks to continue their exchange house business.

Anis A Khan, managing director and CEO of Mutual Trust Bank, said they are trying to open an account with Habib Bank to continue their business there.

Mahfuzur Rahman, executive director and spokesperson of Bangladesh Bank, said they are aware of the Barclays decision.

“The central bank of Bangladesh has nothing to do in this regard. It doesn’t come under our jurisdiction,” Rahman said.

He, however, said the BB governor and the Bangladesh high commissioner in London are trying to persuade Barclays to change its decision.

With more than 300 years of history and expertise in banking, Barclays operates in more than 50 countries and employs 140,000 people. The bank is engaged in personal banking, credit cards, corporate and investment banking and wealth and investment management with an extensive international presence in Europe, the Americas, Africa and Asia.