Five private banks have pending orders for transferring Tk 15.31 crore sent by Bangladeshi expatriates in London through First Solution to their clients. The agency sent invoice letters against the amount but is yet to deposit the money with the banks' foreign currency accounts abroad.

First Solution recently stopped business and applied to the authorities in London to declare it bankrupt, which created panic among clients both in London and Bangladesh. The owners of the agency went into hiding after stopping business on June 27.

BB Governor Dr Salehuddin Ahmed yesterday said the central bank sent a letter to the Bangladesh High Commission in London to investigate the matter.

The BB is also going to investigate if any other money exchange houses abroad are involved in such activities, he said.

In the last couple of days the BB held meetings with the local private banks that have agreement with First Solution to find ways to resolve the crisis.

BB officials, however, said they have little to do to compel the agency to pay the clients as it is authorised by the British government, not by Bangladesh Bank.

"We have advised the partners of First Solution here to consult their lawyers in London as well as the authorities that gave the agency permission to do the business," said a BB official after yesterday's meeting.

Eight private banks in Bangladesh are the local partners for distributing remittances sent from London through First Solution. The banks are South East Bank, National Credit and Commerce Bank Ltd (NCC), Prime Bank, Brac Bank, Uttara Bank, Eastern Bank, Mutual Trust Bank, and Janata Bank.

South East Bank alone has received invoice letters from First Solution for paying Tk 14 crore to its clients. The agency has $50,000 (around Tk 35 lakh) as security money with South East Bank.

BB sources said the NCC bank got orders from First Solution to transfer Tk 13.72 lakh to clients while the agency's security deposit is $10,000 (around Tk 7 lakh). The Prime Bank has pending orders to transfer Tk 28 lakh against a security deposit of $10,000. The Brac Bank has pending orders of Tk 78 lakh with $2,898 (around Tk 2 lakh) of security deposit. Uttara Bank has pending orders to transfer Tk 12 lakh against the agency's security deposit of $25,000 (around Tk 17 lakh).

The Eastern Bank and Mutual Trust Bank have no pending orders from First Solution and have security deposits of $10,000 and $3,500. The Janata Bank has signed the deal with First Solution recently and is yet to start any transaction.

The BB sent an inspection team to London last year to investigate activities of the London-based money transferring agencies that have transaction with Bangladesh. The team found that a number of agencies unlawfully publicised that they have BB approval.

First Solution even used the BB logo on its letterhead and other papers.

The central bank asked these agencies to stop such unlawful activities.

The BB is now considering introducing a fixed higher amount of money as the security deposits for the money transferring agencies.

"We have to be more cautious in selecting remittance houses in future," the BB governor told reporters on Monday after the concluding ceremony of a training course for the newly recruited 100 BB assistant directors.

Meanwhile, the East London Advertiser reported on June 28 that the First Solution is one of hundreds of small money transfer businesses operating across Britain modelled on the US giant Western Union.

"First Solution has been operating around three years. Its Brick Lane office says it takes around £50,000 a day, which is then banked with Barclays and NatWest for processing.

"Records at Companies House show First Solution Money Transfer Ltd is run and owned by three directors.

"These include Dr Fazal Mahmood, managing director of Channel S, the Bengali satellite TV station, and Nazrul Islam, a reporter on Tower Hamlets council's East End Life newspaper," the East London Advertiser reported.

Nazrul, however, explained to the newspaper that he had resigned as a director and sold his shareholding because of "family commitments" a "couple of weeks ago".

Asked if he was aware that First Solution had been having problems, he said, "No. I didn't attend board meetings. It was the others who run the company."