The Bangladesh Bank (BB) has found a serious mismatch between actual imports and import orders of capital machinery and machinery for miscellaneous industries in the first two months of the current fiscal year (FY).
The issue came into the spotlight after releasing revised sector-wise comparative statement of import letters of credit (LCs) at early this month, according to officials.
The actual imports of capital machinery in terms of LCs settlement dropped by 39.78 per cent to $ 825.02 million during the July-August period of the FY 2017-18 from $ 1.37 billion in the same period of the FY 17 while opening of capital machinery LCs, generally known as import orders, increased by 47.92 per cent to $ 941.14 million from $ 636.27 million, according to the revised statement, issued by the Foreign Exchange Operation Department of the central bank.
On the other hand, capital machinery imports jumped by 37.88 per cent to $ 1.89 billion during the period under review as against $ 1.37 billion in the July-August period of the previous fiscal while opening of capital machinery LCs rose by nearly 190 per cent to $ 1.84 billion from $ 636.27 million, according to the original statement, issued by the same department of the BB.
Similarly, actual imports of machinery for miscellaneous industries in terms of LCs settlement fell by 3.02 per cent to $ 841.92 million in the first two months of the FY 18 from $ 868.14 million in the same period of the previous fiscal while opening of such machinery LCs jumped by 59.78 per cent to $ 1.36 billion from $ 851.94 million, according to the revised statement.
However, import of machinery for miscellaneous industries witnessed a 14.95 per cent growth to $ 997.96 million during the period under review compared to $ 868 million in the same period of the previous fiscal while opening of such machinery LCs jumped by 64.32 per cent to $ 1.40 billion from $ 851.94 million, according to the original statement.
The issue was discussed at a meeting of the Monetary Policy Committee (MPC) held at the central bank headquarters in Dhaka on October 08 with BB governor Fazle Kabir in the chair.
Due to such mismatch, it will be scrutinised whether there was the possibility of money laundering through over-invoicing or importing consumer goods in the name of capital machinery, the meeting opined.
"We're now working on the issue," a senior BB official told the FE on Thursday without elaborating.
Earlier, World Bank's lead economist in Dhaka office Dr Zahid Hussain raised question about utilisation of imported capital machinery in the manufacturing sector.
"There was 64.8 per cent growth in capital machinery import between the July-January period of the FY'17. But there are questions whether all of those are utilised for manufacturing purposes," Dr Hussain told a press briefing, releasing the WB's Bangladesh Development Update report in Dhaka on May 14, 2017.
He expressed doubt whether there were cases of "over-invoicing" in the name of capital machinery import and whether the country's investment was really boosting, it needed to look into.