Capital machinery imports surge 48pc in 10 months despite sluggish business

Staff Correspondent | Published: 23:35, Jun 12,2017 | Updated: 00:13, Jun 13,2017

 
 

A file photo shows men looking at machines at a textile machinery fair in Dhaka. — New Age photo

The imports of capital machinery increased by 48.10 per cent in the first 10 months of the current fiscal year of 2016-17, as against 12.24 per cent growth during the same period a fiscal year ago, strengthening a suspicion of money laundering as the growth came amid dull investment situation in the country.
According to Bangladesh Bank officials and an expert, the increased growth of capital machinery in the July-April period of FY17 have not matched up with the existing sluggish investment as the country’s businesspeople are still following a go-slow policy in the area of setting up new industrial units and expanding the existing ones.
The latest BB data, on the other hand, showed that the import of industrial raw metrical posted a lower growth of 3.52 per cent in the first 10 months of FY17 compared with the 3.62 per cent growth in the corresponding period of FY16.
The imports of capital machinery and industrial raw materials usually increase simultaneously if the country’s investment sector performs nicely, a BB official told New Age on Monday.
In such a situation, huge import payments for capital machinery, which did not matched up with those of raw materials, raised a suspicion that money might have been laundered in the name of import of the items (capital machinery), he said.
The imports of capital machinery increased to $4.19 billion in the July-April period of FY17 from $2.83 billion in the same period of FY16 while industrial raw materials to $13.59 billion from $13.13 billion.
The official said that the central bank had failed to take an effective measure to prevent money laundering as a vested quarter laundered the money through over-invoicing of the capital machinery products.
The value of a particular product differs hugely brand to brand, the BB official said.
The central bank earlier asked banks to verify the values of the products mentioned by the importers before settlement of letters of credit, he said.
But, the majority of the banks are unwilling to follow the directive as the verification process slows the entire process, he said.
Former BB governor Salehuddin Ahmed told New Age on Monday that in recent times the import of capital machinery increased significantly, prompting a suspicion that money laundering might have occurred behind such activities.
He feared that some businesspeople were laundering money through over-invoicing in their LCs.
‘There is no apparent sign of using the capital machinery in the industrial sector. Some people may launder capital in the name of import of capital machinery,’ he said.

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