BANGLADESH

Within hours of a parliamentary standing committee proposing formulation of a law to regulate multilevel marketing (MLM) business, the central bank on Sunday warned people against investing in unapproved banking institutions.

In a media statement signed by managing director AFM Asaduzzaman, the Bangladesh Bank cautioned investors not to be swayed by abnormally higher rates of interest offered by 'some institutions'.

"It is to notify all that some institutions under different names are operating like banks in various districts across the country. They are collecting money from people by promising an abnormally higher rate of interest and profit," read the statement.

"As making investments in those institutions not approved by appropriate authorities increases the possibility of being deceived, people are being requested to abstain from going for any financial transaction with those institutions," the statement added.

The central bank notice came amid reports of illegal banking by Destiny 2000 Ltd published in various newspapers over the last few days.

Earlier in the day, the parliamentary standing committee on commerce ministry decided to request the finance minister and the central bank governor for action against Destiny-2000 Ltd-like MLM companies.

"Such companies are swindling people out of millions of taka. We will write to the finance minister and Bangladesh Bank for stopping illegal banking and businesses. We will request for immediate action," said ABM Abul Kashem, chairman of the standing committee.

On Mar 6 last year, then commerce minister Muhammad Faruk Khan had said a law was underway to bring the MLM companies within the legal framework.

There are 62 registered MLM companies operating Bangladesh, Faruk Khan had said.

He had told journalists that only Destiny has 4.5 million clients. Another prominent MLM company is Unipay-2 U.

With regard to rising controversy against Destiny 2000, finance minister Abul Maal Abdul Muhith on Sunday said that action would be taken against the company if the ministry of commerce and Bangladesh Bank make such a recommendation.