Stop illegal banking by cooperatives: BB

The Bangladesh Bank yesterday urged the Department of Cooperatives to take measures against the illegal banking operation carried out by several cooperative societies.

It raised the issue at a virtual meeting among the country's top financial regulators, according to Md Serajul Islam, spokesperson of the central bank.

Senior officials of the financial regulators -- the BB, the Bangladesh Securities and Exchange Commission, the Insurance Development and Regulatory Authority, the Registrar of Joint Stock Companies and Firms, the Microcredit Regulatory Authority, and the Department of Cooperatives -- attended the meeting.

Abdur Rouf Talukder, governor of the central bank, presided over the meeting.

Islam said that some cooperative societies are using the word 'bank' in their names, which is misguiding ordinary people.

Besides, they are running illegal banking by mobilising deposits from the general public, putting their funds at risk.

Some cooperative societies are also giving out loans to individuals who are not members of the organisations, ignoring rules.

"So, the central bank requested the Department of Cooperatives to take regulatory measures to stop their unlawful operations," Islam added.

"We talked about the undistributed dividend of the listed banks and NBFIs so that they deposit the funds to the capital market stabilisation fund," said Shaikh Shamsuddin Ahmed, a commissioner of the BSEC.

The central bank also agreed to the BSEC definition of the undistributed dividend, he said.

"The central bank is always supportive of the stock market," Ahmed said, adding that the BSEC has had a fruitful discussion with the BB on the corporate governance code.