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Tax evasion scandal: Bangladesh Bank to inspect HSBC's local office

12 Feb,2015


Dhaka, BdChronicle:

Bangladesh Bank will inspect HSBC's local office to ascertain if any local branch of the global bank has any involvement in the alleged tax evasion scandal identified in its Swiss private banking arm.
 
The central bank took the decision following its meeting with top officials of the local HSBC head office on Thursday.
 
According to a report, the British banking giant allegedly operated a major tax evasion scheme via its Swiss subsidiary, HSBC Private Bank (Suisse).
 
The bank's data shows that it holds accounts of 106,000 clients from 203 countries who had deposits worth $102.05 billion. Among the countries was Bangladesh, which ranked 148 in terms of deposit. Around $13 million (over Tk 101 crore) were deposited with HSBC Private Bank by 16 individuals connected to the country, 31 percent of whom bore the Bangladeshi nationality or passport.
 
They had a total of 34 accounts, opened between 1985 and 2006, including seven offshore accounts.
 
Of the $13 million deposits, the maximum amount of money associated with a single client was $4.4 million (over Tk 34 crore). However, the report did not mention the name of the individual who had the amount. But it is not clear if the amounts were laundered from the country.
 
After such a report in the media, the Bangladesh Bank summoned the HSBC local top officials to the central bank to learn about their stance on the report and also the involvement of the local office in the money laundering and tax evasion scandal.
 
About the meeting, Bangladesh Bank's executive director Mahfuzur Rahman informed that the local office officials of the HSBC denied their involvement in the alleged scandal as those happened between 1985 and 2006 while the bank started its operation in Bangladesh in 1996.
 
"We'll soon send our team to inspect the issues in the HSBC's local office and its branches. We'll carry out a thorough investigation to determine the facts," he told UNB.
 
He also said the central bank will try to acquire information from the HSBC's Swiss arm "HSBC Private Bank (Suisse)" if possible.
 
According to the report, among the South Asian nations, India topped the list with $4.1 billion deposited with HSBC's Swiss arm. India ranked 16th on the list in terms of balance, with the maximum amount associated with a client connected to India being $876.3 million.
 
The Swiss Leaks report say Pakistan is ranked 48 with $859.7 million against 314 client accounts. Nepal came in 116 with $54 million, Myanmar (Burma) 133 with $26.5 million and Sri Lanka 112th with over $58 million.
 
Switzerland itself tops the list with over $31 billion followed by the UK with over $21 billion.

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