Mercantile Bank has sent a rejoinder to a report titled “Cash incentive rules flouted” published in The Daily Star on February 27.
Signed by Mati Ul Hasan, additional managing director of the bank, the rejoinder says: “The bank management understands that actual information has not been depicted in the report. It has been stated in the report that our bank paid cash incentives to the exporters without repatriation of export proceeds.
“In fact, no cash incentives were paid in favour of the exporters without repatriation of export proceeds of the export concerned. In all cases, cash incentives had been paid after obtaining PRC (Proceeds Realisation Certificate) and audited certificates issued by the external audit firms completing audit on the cash incentive files as per Bangladesh Bank rules.
“However, during settlement of some cash incentive cases, few export bills of Kuliarchar Sea foods (Cox's Bazar) under their other exports remained pending beyond the prescribed time limit of Bangladesh Bank against which they filed a writ petition with the High Court against non-payment of export proceeds by the issuing bank and the honourable court gave verdict “to allow the petitioner to continue its banking activities/transactions in regular manner without any interference and hindrance”. No cash subsidy was paid against these bills.
“Similarly, no cash incentives had been paid against any non-repatriated export proceeds of Teamex Jute Mills, Utah Knitting & Dyeing Company and Creative Woolwear.
“Ratul Fabrics and Ratul Knitwear -- two concerns of Ratul Group -- are 100 percent export-oriented composite readymade garments producer-exporters. As per the circular concerned of the central bank, the exporters applied for cash incentives under 'Form-Kha' wherein declaration of the yarn producer is not applicable for local fabrics producer cum exporter.
“The above report may create false impression in the mind of the people and the business community against Mercantile Bank.”
The Daily Star ran the report on the basis of an inspection report of the Bangladesh Bank. The BB carried out the probe in November last year.
On January 7, the central bank asked the Mercantile Bank authorities to take punitive actions against the officials involved in irregularities relating to the cash incentive by the first week of February.
The central bank, however, extended the deadline to February 28 upon the bank's request.
This newspaper contacted Mati Ul Hasan for his comment. He admitted that some irregularities took place in disbursing cash incentives to five companies, but he termed it an “unintentional mistake”.
He also said the bank has already taken steps so that such wrongdoings do not recur.
We stand by our report.