BRAC Bank wins case challenging UK’s decision to cancel BSEL licence

BRAC Bank has recently won a case challenging the UK authority’s decision to cancel the business registration of BRAC Saajan Exchange Limited (BSEL), a subsidiary of the bank.

“We are working to reopen our operations soon after one year of closure,” Abdus Salam, CEO of BSEL, told Business Insider Bangladesh over the telephone recently.

Salam said the UK authority had brought 45 counts of regulatory failures against BSEL and cancelled the licence. “We have won 41 of those regulatory failures and the rest four are very minor issues,” he said.

Selim RF Hussain, managing director and CEO of BRAC Bank, also confirmed that they have won the case and got BSEL’s licence back.

Earlier on May 26, 2021, BSEL received a letter from Her Majesty’s Revenue & Customs (HMRC), which is responsible for collecting, paying, administering and enforcing taxes, cancelling its business registration with immediate effect on account of multiple alleged breaches of regulations, according to a Business Insider Bangladesh report published on June 2.

Accordingly, all transactions were immediately stopped and the Financial Conduct Authority or FCA, which is the conduct regulator for financial services firms and financial markets in the UK, was informed.

The bank in its annual report for 2021 said that BSEL has strongly rejected the allegation of breaches through a team of high-profile lawyers.

“BSEL strongly believes that HMRC’s decision was unjust and lacks substance and is mostly on the basis of incorrect assumptions. This view is supported by the lawyers,” reads the bank’s annual report.

BRAC Bank was one of the pioneers in opening an exchange house – BSEL - in the UK to provide remittance services for non-resident Bangladeshis in the UK and Europe. The company used to provide remittance services and cross-border payment solutions for South Asian migrants living in the UK and Europe.

Prior to the cancellation, BRAC Bank said BSEL’s business was on track to return to profitability following the difficulties of 2020. Total remittance to all receiving counties of £114.6m was achieved and this was set to continue to grow. This included remittance from the relationships with MoneyGram and Visa Payments, all other cash-based aggregator partners had been previously de-risked.

The UK authority cancelled licences of nine Bangladeshi exchange houses alleging regulatory failures including handling a lot of cash transactions, insiders in the banking industry said.