The United States has requested that Sonali Bank, a state-owned bank in Bangladesh, close its accounts in two banks in Myanmar that are currently under sanctions from the US government.
Later, the US Embassy in Dhaka wrote a letter to Bangladesh’s foreign ministry, asking for closing the accounts of Sonali Bank in those banks.
On 3 August, the foreign ministry forwarded the letter to Sonali Bank and advised it to take necessary measures.
The situation has put the country’s biggest state-owned bank in a difficult position. Sonali Bank has $17,000 in deposits with Myanmar Foreign Trade Bank and $200,000 with Myanmar Investment and Commercial Bank.
Sonali Bank officials said the money is now frozen, which means that they cannot withdraw or transfer the amounts.
On the other hand, Sonali Bank has deposits of $100,000 from Myanmar Foreign Trade Bank and $1 million from Myanmar Investment and Commercial Bank. The Myanmar government is now trying to withdraw the amounts, and the Myanmar ambassador in Dhaka has also held a meeting with Sonali Bank to this end, said the officials.
The Bangladesh Bank has suggested that Sonali Bank does not transfer the money right now, they said.
Most of Bangladesh’s bilateral trade with Myanmar is done through Sonali Bank.
Sonali Bank Managing Director Afzal Karim told TBS, “The accounts have been kept as they are for the time being. But no transaction is taking place. No decision has been made yet on their closures. The decision will be made as per instructions from the relevant authorities. Initially, it was thought that the money from those two banks should be transferred to other banks. But it is not possible due to the sanctions.
“On the other hand, the money of the Myanmar banks in Sonali Bank will not be transferred. Although the Myanmar ambassador wants his country’s bank money to be transferred to another bank, there is no scope to transfer money held by banks under sanctions.”
Sonali Bank has sought instructions from the Bangladesh Bank on the issue. But the central bank has not issued any clear decisions yet.
Immediately after the letter from the US Embassy, the Dhaka office of the US multinational financial services company JPMorgan also sent a letter to Sonali Bank, asking for information about its accounts in banks under sanctions across the world and the latest status of transactions with them.
JPMorgan works as a partner of Sonali Bank in various fields of international transactions, such as payment settlement and letters of credit confirmation.
Mollica Senapati, a spokeswoman in Mumbai for JPMorgan, declined to comment, saying in an email, “Thanks for reaching out. We, however, decline to comment on the issue.”
Following the outbreak of the Russia-Ukraine war, the US has imposed sanctions on several Russian banks and individuals. Since then, it has become difficult to do direct business with Russia from Bangladesh. Bangladeshi banks used to have correspondent banking with sanctioned banks and had more transactions, which is not happening now. The US has imposed sanctions on some institutions and individuals in Russia’s ally Belarus as well.
America has introduced a new visa policy for Bangladesh, outlining restrictions on any Bangladeshi nationals deemed responsible for or involved in obstructing a democratic election process in the country.
Bangladesh’s bilateral trade with Myanmar is not big.
Bangladesh imports timber, frozen fish, ginger, onions, betel nut, woollen brooms, coconuts, pickles, dried fruits, cane, tamarind seeds, pulses, and chickpeas from Myanmar under the border trade between the two countries.
On the other hand, the exports from Bangladesh to Myanmar are potatoes, biscuits, hosiery and plastic products.
According to data from the Export Promotion Bureau (EPB), Bangladesh exported merchandise worth nearly $3.9 million to Myanmar in 2021-22.
On the other hand, according to the latest data from the Bangladesh Bank, in the fiscal 2020-21, Bangladeshi businessmen imported products worth Tk1,409 crore (equivalent to about $130 million as per the current dollar rate) from Myanmar.