The central bank starts investigation into entire money-market transactions along with exposures on the capital market to gauge liquidity movements in the banking system, following some already-detected incongruities.
At least six teams of the Bangladesh Bank (BB) are now probing different transactions of treasury and investment departments of the banks and non-banking financial institutions (NBFIs), officials said.
The teams have already been assigned to conduct probe into nine scheduled banks and three NBFIs, they added.
"The inspectors have also been assigned to scrutinize the net open position (NOP) of the foreign currency of the banks concerned," a BB senior official told the FE Wednesday.
The term NOP stands for net outstanding balance of all assets, liabilities, and off-balance-sheet items of banks.
Meanwhile, the central bank started collecting information on short-term loans or placements with names of the clients along with the banks' daily reports on their own, subsidiaries and others' net exposures on the capital market on August 16.
The BB has already found some inconsistencies in the information provided by the banks earlier, the central bank said, without elaborating.
Earlier on August 13, the central bank asked the banks to submit information on short-term loans or placements with names of the clients to the Department of Offsite Supervision (DOS) of the central bank by 5:00pm each working day.
Besides, the banks have been instructed to send their daily reports on their own, subsidiaries and others' net exposures on the capital market in line with a prescribed format within the stipulated timeframe.
Actually, the BB has sought such information on markets to know the inflow and outflow of funds to and from the money market in order to guard against any bubble and its burst.
The BB's latest moves came against the backdrop of issuance of a forewarning as part of a precautionary measure to avert possible 'asset bubble' with a note for the banks to check diversion of funds into unproductive sectors.
Also, the commercial banks have been directed to ensure right end-use of the funds through conducting necessary inspections by their internal audit departments.
The BB had already found a portion of funds under the stimulus packages being diverted and used for unproductive purposes instead of proper utilization in the selected respective sectors.
In some cases, borrowers have adjusted his/her other credits with loans under the low-cost funds, the BB said in its two-page letter conveyed to the banks on July 25.