Bangladesh fines Islami bank for terror financing

BANGLADESH: Bangladesh's central bank has fined the country's top sharia-based commercial bank, Islami Bank, for transactions linked to Islamist militants.

"A 100,000 taka ($1,425) fine was imposed on the IBBL under the anti-money laundering act after we had detected some transactions by them in violation of banking rules," an official with the Bangladesh Bank told Reuters on Thursday.

"Although the amount is small, it is significant as the first penalty of the sort imposed by the central bank, which is investigating suspicious transactions in a number of banks," said the central bank official, who asked not to be identified.

The investigation is part of a government crackdown on Islamist militants, mostly members of two outlawed groups who are fighting for the introduction of tough Islamic religious law in Bangladesh, a mainly Muslim democracy. The militants have killed at least 30 people and wounded 150 in a series of bomb attacks since August last year.

A senior official of the Islami Bank last week denied it had played a role in financing militants although central bank regulators detected funds had been transferred to suspicious accounts from its branches.

The Islami Bank has come under the spotlight of the investigations as it draws most of its capital from overseas Islamic institutions. The management of the Islami Bank Bangladesh Limited (IBBL) has been asked to pay the fine within 10 days, central bank officials said.

They said the IBBL also had been asked to report on action taken against officials and employees involved in the "evil transactions."

"They (Bangladesh Bank) are the guardian in the banking sector and we have nothing to say against them," Mohammad Ataur Rahman, senior vice-president and spokesman of the IBBL, told Reuters when asked about the fine.

Dhaka, Thursday Reuters