Bangladesh Bank Governor Abdur Rouf Talukdar on Wednesday issued strict instructions to all banks to prevent under-invoicing and asked them to enhance their monitoring efforts to curb hundi transactions.

The governor conveyed these instructions during a meeting with the managing directors of all banks operating in the country on Wednesday in Dhaka, according to Bangladesh Bank Spokesperson Mezbaul Haque.

The Governor conveyed that under-invoicing and an informal cross-border money-transfer system also known as Hundi that bypasses the legal banking system, devoid the government of import duty collection amid a dollar crisis.

Mr. Haque said that with the strict monitoring of the central bank, over-invoicing has come under control by about 80%. But importers are turning to under-invoicing as one of their tax evasion tools. He also said that if under-invoicing of imported goods is reduced, the trend of hundi will decrease and the import tax of the government will increase.  As a result, the inflow of remittances will increase and that will boost the forex reserve of the country.