Bank chairmen, directors must sign anti-corruption pledges under new BFIU directive

In a sweeping move to restore governance and public trust in the financial sector, the Bangladesh Financial Intelligence Unit (BFIU) has mandated that chairmen, directors, and managing directors of all scheduled banks sign formal pledges against corruption and money laundering.

The anti-money laundering agency, in a recent internal circular sent to banks, instructed that these commitments must not only be signed but also displayed prominently in executives' offices to ensure visibility and accountability.

Under the directive, bank chairmen and managing directors must explicitly declare that they will neither engage in nor tolerate corruption or bribery, and will take a firm stance against fraudulent loans, forged documents and financial misconduct. The BFIU has also provided a standard format for the pledge.

The initiative comes amid growing concerns over weak corporate governance, poor credit discipline and inadequate risk management in the banking sector.

The BFIU noted that large-scale loan fraud has taken place in recent years, exposing systemic vulnerabilities.

In response, the regulator has taken what it describes as a stringent step to reinforce ethical standards, transparency and accountability, while strengthening mechanisms to prevent money laundering and financial crimes.

According to the directive, all chairmen, directors, managing directors and chief executives of banks operating under Bangladesh Bank must submit a separate declaration on preventing money laundering and letter of credit fraud, which must also be displayed in their offices.

The order further stipulates that such pledges will be mandatory for every new appointment or reappointment of chairmen, directors and managing directors going forward.

Banks have also been instructed to inform customers that they can report incidents of bribery, corruption or harassment directly to the BFIU.

To facilitate this, institutions must ensure the confidentiality of complainants and install complaint boxes and QR codes in visible locations.

Chairmen and managing directors must explicitly state: "I will not engage in, accept, or tolerate corruption or bribery."

The BFIU also warned that approving loans outside policy guidelines, or based on improper assessment, will be treated as punishable offences.

Additionally, the banks will have to adopt an extremely strict stance against fraudulent loans, fake collateral, and forged documents.

Any misassessment of loan applications or unjustified approvals will be treated as punishable offences.

The directive underscored a zero-tolerance policy towards money laundering, describing it as an act of betrayal against the country.

It also cautioned against undocumented or fraudulent letters of credit and fake export bills.

The BFIU said the measures are intended to restore discipline, improve governance and rebuild customer confidence in the banking sector.