38-547: First Solution Money Transfer was a UK -based private limited company which provided a money transfer service , providing expatriates the facilities to transfer money back to their family in Bangladesh. In June 2007, the company went into liquidation owing nearly GB£ 2 million pounds to the public, the majority of whom were from the Sylhet region of Bangladesh . Campaigns organised by various community leaders and
76-411: A limited company it operated on the principle of caveat emptor - buyer beware. That's the capitalist logic of formality. It is still unclear if the situation had been exacerbated as a result of media pressure causing thousands of people to demand immediate refunds effectively causing a cashflow crisis at the company and forcing it to call in liquidators. Investigation is currently ongoing to determine
114-401: A minimum capital adequacy, to systematically classify loans and to implement modern computerised systems, including those that handle accounting. It forced the central bank to free up interest rates, revise financial laws and increase supervision in the credit market. The government also developed the capital market, which was also performing poorly. The FSRP became defunct in 1996. Afterwards,
152-570: A monopoly over the issue of currency and banknotes (except for the one, two and five taka notes and coins, which are the responsibility of the Ministry of Finance of the Government of Bangladesh). The major functional areas include: The bank's highest official is the governor. His seat is in Motijheel , Dhaka. The governor chairs the board of directors. The executive staff, also headed by
190-533: A number of banks in Bangladesh through which it was permitted to remit money into the country. However, there are also a number of companies in the UK provided remittance facilities to Bangladesh which do not have the approval of Bangladesh Bank nor are they listed in the UK section of Bangladesh Bank's inward remittance providers list. In an article in the East London Advertiser , Dr. Roger Ballard of
228-430: A point of intervening everywhere, it did not set up a proper regulatory system to diagnose such problems and correct them. Hence, banking concepts like profitability and liquidity were alien to bank managers, and capital adequacy took a backseat. In 1982, the first reform program was initiated, wherein the government denationalised two of the six nationalised commercial banks and permitted private local banks to compete in
266-400: A pro-socialist agenda. In 1972, the government decided to nationalise all banks to channel funds to the public sector and to prioritise credit to those sectors that sought to reconstruct the war-torn country – mainly industry and agriculture. However, government control of the wrong sectors prevented these banks from functioning well. This was compounded by the fact that loans were handed out to
304-468: A service which was easier to access, cheaper, swifter, and if anything even more reliable than those provided by the banks and other former sector agencies. DFID thought otherwise. First Solution was only too ready to agree, and carefully conformed with the necessary regulatory requirements - which were all about countering Terrorist finance and Anti-money laundering . The regulations made no reference to steps to be taken to ensure financial reliability. In
342-458: A similar amount the following year, during which independent auditors were also paid GB£5,000 for their services. In keeping with the company's presentation of itself as a small business, the directors concluded, and the auditors concurred, that there was no need to include any details of the funds which the Company transferred to Bangladesh on behalf of its customers. Hence the only indication of
380-708: Is the central bank of Bangladesh and is a member of the Asian Clearing Union . It is fully owned by the Government of Bangladesh . The bank is active in developing green banking . and financial inclusion policy and is an important member of the Alliance for Financial Inclusion. Bangladesh Financial Intelligence Unit (BFIU), a department of Bangladesh Bank, is a member FIU of the Egmont Group of Financial Intelligence Units . Bangladesh Bank
418-403: Is the first central bank in the world to introduce a dedicated hotline (16236) for people to complain about any banking-related problem. Moreover, the organization is the first central bank in the world to issue a "Green Banking Policy". To acknowledge this contribution, then-governor Dr. Atiur Rahman was given the title 'Green Governor' at the 2012 United Nations Climate Change Conference , which
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#1732787385998456-733: The Bangladesh Bank Building in Motijheel, which has two general managers. The executive staff is responsible for daily affairs and includes the governor and four deputy governors. Under the governors, there are executive directors and an economic advisor. The directors of the departments come under the executive directors and are not part of the executive staff. The four deputy governors are: Nurun Nahar, Dr. Md. Habibur Rahman, Md. Zakir Hossain Chowdhury and Dr. Md. Kabir Ahmed . The general supervision and direction of
494-620: The Companies Investigation Branch of the BERR (formerly DTI ) On 8 July 2007, a rally was held at Altab Ali Park where George Galloway called on the government to compensate the victims for the money they lost in this scandal. On 10 July 2007, George Galloway held a meeting with Kitty Ussher ( Economic Secretary to the Treasury ) and called on the government to set up a Farepak -style crisis fund to compensate
532-480: The Bangladesh money transfer industry in the UK. Measures are being put in place by the Government of Bangladesh to ensure a similar situation does not occur again. The sudden closure of former First Solution Money Transfer Ltd (now known as XTL Ltd) on 28 June 2007 was a major blow to the UK Bangladeshi community which used it to send their hard earned money to relatives in Bangladesh. Since then, some of
570-538: The Bank's affairs and business are entrusted to a Board of Directors. This Board can exercise all powers and perform all acts on behalf of the Bank. Composition of the Board: Bangladesh Bank publishes a range of periodical publications, research papers and reports that contain monetary and banking developments, economic reviews and various other statistical data. These include: Since its conception,
608-583: The Centre for Applied South Asian Studies at the University of Manchester suggests that First Solution may well have been the first fruits of efforts by the UK's Department for International Development (DFID) to replace 'informal' community-based value transfer networks with 'more reliable' formal sector initiatives. DFID made a GB£ 7.5 million grant to the Bank of Bangladesh to achieve just that. But although their publicly announced reason for doing so
646-739: The E-Bangladesh news site, the directors re-iterated their views on the cause of the downfall. An investigation has been initiated at the request of Stephen Timms , minister of the Department for Business, Enterprise and Regulatory Reform . In the early hours of 6 July 2007, the Metropolitan Police seized documents and computers from the First Solution head offices in London. These materials have now been requisitioned by
684-739: The Financial Sector Reform Programme (FSRP) were formed in 1990, upon contracts with the World Bank . These programs sought to remove government distortions and lessen the financial repression . Policies made use of the McKinnon-Shaw hypothesis, which stated that removing distortions augments efficiency in the credit market and increases competition. They involved banks providing loans on a commercial basis, enhancing bank efficiency and limiting government control to monetary policy only. The FSRP forced banks to have
722-418: The Government of Bangladesh formed a Bank Reform Committee (BRC), whose recommendations were largely unaddressed by the then-government. Currently, it has ten offices located in Motijheel, Sadarghat, Chittagong, Khulna, Bogra, Rajshahi, Sylhet, Barisal, Rangpur and Mymensingh in Bangladesh; total manpower stands at 5807 (officials 3981, subordinate staff 1826) as of 31 March 2015. Bangladesh Bank performs all
760-454: The banking sector. In 1986, a National Commission on Money, Banking and Credit was appointed to deal with the problems of the banking sector and several steps were taken for the recovery targets of the nationalised commercial banks and development financial institutions (as well as prohibiting defaulters from getting new loans). Still, the efficiency of the banking sector could not be improved. The Financial Sector Adjustment Credit (FSAC) and
798-651: The company's success (or failure) in implementing its core business was the declaration of a small loss of GB£435 on its foreign exchange activities during 2005–06. No details of the company's activities during the following financial year are available at Companies House, since the business had by then collapsed. First Solution Money Transfer had its headquarters at the London Muslim Centre in east London with another prominent office in Brick Lane . Additional branches and affiliated agents were dotted around
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#1732787385998836-568: The documents give no indication as to how or to whom the shares were distributed. In presenting its accounts to Companies House, First Solution presented abbreviated accounts in accordance with the Financial Reporting Standard for Smaller Entities; these standards also obviated the need for the company to provide a cash flow statement to the authorities. As a result, the data available from Companies House about First Solution's business activities are remarkably skimpy. As
874-494: The figures are presented, the most substantial item in First Solution Money Transfer's accounts is an interest-free loan which the company had made to First Solution UK Ltd, and of which Dr. Fazal Mahmood and Mr Ghulam Rabbani were also directors. This loan amounted to GB£24,834 in 2005, and had risen to GB£190,697 in 2006. The documents also show that the directors paid themselves GB£9,600 in 2004–05, and
912-519: The former agents and branch staff of First Solution embarked on a 'corporate recovery' package to resolve this situation and reach a position whereby all remittance creditors can be paid. The new management of First Solution, consisting of 13 former Agents and Branches, successfully acquired the First Solution brand and commenced trading in May 2008. One of the stated goals of the new organisation
950-474: The full extent of the problem and whether the company was involved in fraudulent activities or undertook risky speculative business in the currency market . In a press statement displayed on the company's website, the directors stated that Bangla TV , a UK-based Bengali language satellite TV channel, had been irresponsible in showing angry public opinion calling for the directors and their families to be "pursued" and not to rest until they were shown "naked in
988-466: The functions that a central bank in any country is expected to perform. Such functions include maintaining price stability through economic and monetary policy measures, managing the country's foreign exchange and gold reserve, and regulating the banking sector of the country. Like all other central banks, Bangladesh Bank is both the government's banker and the banker's bank, a "lender of last resort". Bangladesh Bank, like most other central banks, exercises
1026-635: The fund. The issue was debated in Parliament on 18 July 2007. On 3 August 2007, the Government's Official Receivers were appointed as provisional receivers at the request of the Secretary of State, Stephen Timms. A provisional court date of 6 November 2007 has been announced. UK">UK The requested page title contains unsupported characters : ">". Return to Main Page . Bangladesh Bank Bangladesh Bank ( Bengali : বাংলাদেশ ব্যাংক )
1064-430: The governor, is responsible for the bank's day-to-day affairs. Bangladesh Bank also has a number of departments under it, namely Debt Management, Law, and so on, each headed by one or more general managers. The Bank has 10 physical branches: Mymensingh, Motijheel, Sadarghat , Barisal , Khulna , Sylhet , Bogra , Rajshahi , Rangpur and Chittagong ; each is headed by an executive director. Headquarters are located in
1102-416: The local Member of Parliament have led to investigations of the collapse by the Metropolitan Police and a review of this industry by the government. Tighter regulation in this sector were expected to be introduced by 2009. The government has also indicated support for the setup of a crisis fund to compensate the victims. According to the records available at Companies House , First Solution Money Transfer
1140-556: The major towns and cities of the UK with a few in the rest of Europe. The company grew from its inception in July 2004, increasing turnover from 4 million GBP to approximately 87 million GBP year ending 2007 The company went into liquidation in June 2007 owing, according to the company directors, GB£ 1.7 million pounds to the public who had used its money transfer service in the preceding 2–3 months. The scandal sent shockwaves through
1178-556: The past there had been no need to do so. Trust-based networks which grew out of local communities had been extremely reliable. However, First Solution was a totally different kind of beast. It was organised by the top down, had the blessings of the Bangladesh Bank, and perhaps of DFID as well (although they have so far kept their heads well below the parapet). But First Solution was a limited company: it wasn't grounded in networks of mutual trust or coalitions of reciprocity; and as
First Solution Money Transfer - Misplaced Pages Continue
1216-416: The public sector without commercial considerations; banks had poor capital lease, provided poor customer service and lacked all market-based monetary instruments. Because loans were given out without commercial considerations (and also took a long time to call a non-performing loan ), recovery under the erstwhile judicial system was so expensive that loan recovery was abysmally poor. While the government made
1254-424: The street". The directors have also stated that Bangla TV had caused panic among the community by falsely stating that the company had gone bankrupt when it hadn't on 25 June 2007. The company, therefore, had no choice but to call in liquidators as the investment and cash-injection it was seeking at the time had fallen through as a direct result of these misrepresentations by Bangla TV. In an e-mail interview given to
1292-426: The victims. The minister said there would be support for such a fund from the government and a statement would be made to parliament shortly on the First Solution crisis. Hundreds of people demonstrated and lobbied MPs outside the houses of parliament on 11 July 2007. The government has confirmed it is planning a rescue package to compensate the victims although the government itself would not be donating any money into
1330-872: Was held at the Qatar National Convention Centre in Doha . On 7 April 1972, after the Bangladesh Liberation War and the eventual independence of Bangladesh, the Government of Bangladesh passed the Bangladesh Bank Order , (P.O. No. 127 of 1972), reorganising the Dhaka branch of the State Bank of Pakistan as Bangladesh Bank, the country's central bank and apex regulatory body for the country's monetary and financial system. The 1972 Mujib government pursued
1368-401: Was set up as a Limited Company with a share capital of GB£ 100 on 14 April 2004. Of these 35 shares were held by Dr. Fazal Mahmood, 35 by Mr Ghulam Rabbani, 25 by Shah Mohammed Abdul Hadi, and 5 by Mohammed Nazrul. All four were named as directors of the company, and Ghulam Robbani as the company secretary. A further 40,000 shares of GB£1 each were issued during the 2005-06 accounting year, but
1406-435: Was to pay back as much of the money as possible to people who had lost funds in the scandal. It is unclear how much of the money has been repaid. The UK government was expected to bring in tighter regulation to this sector by 2009. The Bangladesh Bank governor stated that First Solution was not given a license by the Bangladesh Bank. However, First Solution is listed on the Bangladesh Bank's website as having agreements with
1444-542: Was to provide migrants with cheaper and more reliable services, the underling subtext of such initiatives - also strongly backed by the World Bank and the US Treasury - was to prevent these 'informal' 'underground' networks being used by terrorists and drugs smugglers - even though there was little or no evidence that hawala networks were actually being used for such purposes. Most informed commentators concluded that such 'informal' networks provided migrant workers with
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