Agrani not closing loss-making exchange house in Canada

Posted by BankInfo on Wed, Aug 02 2017 08:22 am

The board of directors of Agrani Bank now wants to keep running its loss-making money exchange house in Canada, for which it earlier received regulatory approval to shut it down.

Since its inception in 2014, the Agrani Remittance House Canada incurred a loss of $308,448 and brought in $3.5 million in remittance to Bangladesh.

The banking regulator gave go-ahead when the bank wanted to close operation of the exchange house in June last year.

The BB then said the bank established the exchange house without conducting a feasibility study and wasted a huge amount of foreign currency.

The bank was then strictly warned for taking such an unwise decision. But, now the bank is repeatedly seeking extension of the exchange house's activities for a year. The regulator rejected Agrani's proposal for the third time last month.

Agrani is trying to continue operation of the exchange house due to the demand of Bangladeshi expatriates living in Canada, said Mohammad Shams-Ul Islam, managing director of the bank.

“We took various measures to reduce the expenditure of the exchange house, and the remittance inflow through the branch has gradually been improving,” Islam said. “It is our last attempt to keep Bangladesh's flag hoisted in Canada.”

The bank received BB's consent to open the exchange house in 2012 and started its operation in June 2014. The bank has so far invested around $680,000 to establish the exchange house, according to the BB report.

Due to the high expenditure, the exchange house made a loss of $153,000 in the first year of its operation in 2014 although it brought in around $564,000 in remittance.

In 2015, the amount of loss decreased to around $100,000 although the branch channelled around $1.5 million in remittance into Bangladesh.

In 2016, the bank managed to minimise the loss to $60,704 while the remittance through the exchange house touched around $1.5 million, according to Agrani data.

Canada was the 20th top remittance sending country for Bangladesh in 2015-16. Bangladesh received $55.10 million in remittance from Canada, 2.79 percent of which came through the exchange house.

The remittance inflow from Canada decreased by 10 percent year-on-year to $49.54 million in 2016-17, according to the central bank data. Currently, Exim Bank has a money exchange house in Canada and has remittance drawing arrangement with seven money exchange houses of the country.

Agrani fell in a capital shortfall of Tk 442.63 crore in March this year from a surplus of Tk 46.56 crore in December last year, central bank data shows.

The classified loan of the bank also increased to 25.83 percent from 25.44 percent during the same period. The bank made a net profit of Tk 59.56 crore in March this year.

The bank has 935 branches across Bangladesh. Of them, 78 counted loss in 2016 while the number was 16 in the previous year. 

News:Daily star/2-Aug-2017
Posted in Banking, News