Bangladesh to probe HSBC bank terror funding charges
Bangladesh's central bank said today it had launched a probe into allegations that two local Islamic banks helped fund terrorist groups amid lax controls at banking giant HSBC.india Updated: Jul 18, 2012 20:08 IST
Bangladesh's central bank said on Wednesday it had launched a probe into allegations that two local Islamic banks helped fund terrorist groups amid lax controls at banking giant HSBC.
The US Senate in a report found that HSBC allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.
HSBC apologised on Tuesday for failing to enforce anti-laundering rules and one of its senior executive resigned as US lawmakers accused the global bank of giving Iran, terrorists and drug dealers access to the US financial system.
The report said HSBC Bank USA "provided US dollars and banking services to some banks in Saudi Arabia and Bangladesh despite links to terrorist financing".
Lenders named by the US Senate report as suspected of having helped fund illegal activities included Saudi Arabia's Al Rajhi Bank and Bangladesh's Islami Bank Bangladesh Ltd and the Social Islami Bank Ltd.
"We are now investigating the allegations in line with the US Senate report," said central bank deputy governor SK Shur Chowdhury.
Saudi Arabia's Al Rajhi group holds a 37% direct ownership stake in the Islami Bank Bangladesh Ltd, the country's largest private lender, the US Senate Permanent Subcommittee on Investigations report said.
The Social Islami Bank Ltd has partnerships with the Saudi Arabian charity International Islamic Relief Organisation, also a US-listed institution that is under suspicion.
Islami Bank denied allegations it financed terror, while the Social Islami Bank said it was not involved in any money-laundering or illegal transaction.