BB orders MFS providers to stop online gambling transactions

The Bangladesh Bank has directed all mobile financial service (MFS) providers to take urgent steps to prevent illegal online gambling transactions through their platforms. However, MFS operators argue that it is nearly impossible to identify the nature of transactions.

They said the true purpose of person-to-person transactions cannot be determined easily, while some agents or merchants may use MFS accounts to funnel large sums to gambling sites through a chain of transfers, making them even difficult to track.

Acting on the ICT Division's directive, the central bank recently issued letters to all 13 MFS providers in the country, a copy of which was obtained by TBS.

Warning that MFS platforms are used to launder money abroad through illegal gambling, the central bank has instructed providers to urgently make a list of suspicious accounts.

TBS Infograph

The letter instructed all MFS providers to form a task force and implement a functional, automated monitoring system, enhanced with AI. A public reporting portal and helpline must also be set up to allow citizens to report gambling-related complaints.

The Bangladesh Bank also plans to meet with seven MFS operators on 6 November to review the steps taken to prevent gambling-related transactions, a central bank source said. 

No agency has precise information on how much money is being transferred out of the country through online gambling. "The figure could be around Tk5,000 crore," said a senior Bangladesh Bank official, on condition of anonymity.

He told TBS that the Bangladesh Telecommunication Regulatory Commission (BTRC) has already blocked all gambling websites operating in the country. However, gambling continues through virtual private networks (VPNs).

In addition to BTRC's efforts, the central bank will take a strict stance to monitor whether such transactions are occurring through banks and MFS platforms.

Another BB official said that some agent points or merchants of MFS platforms can directly make payments to gambling sites. They are paid by gamblers in taka. To convert to dollars, they may pay higher rates, and transactions are routed through multiple layers, making large daily transfers hard to track.

TBS spoke to a former professional gambler. On condition of anonymity, he told TBS that people in Bangladesh create profiles on betting apps to play online gambling. Players can wager on all types of games, usually focusing on those where they have the most experience.

Essentially, anyone interested in online gambling registers on a betting app, which provides a business account through an MFS platform. Money is transferred into this account from another account, and after the betting ends, winnings can be withdrawn, he added.

However, a central bank official said that when Bangladeshi gamblers lose on betting apps, money is easily funnelled out of the country, but when they win, funds face multiple hurdles to enter. Since online gambling is illegal, gamblers' identities remain hidden, and their registration details are often untraceable.

Tanvir Hassan Zoha, assistant attorney general at the International Crimes Tribunal, Bangladesh, said, "Until now, all online gambling transactions have undoubtedly taken place through MFS platforms; I have not seen any occur via bank accounts. Investigations should target MFS accounts where suspicious funds are being deposited.

"Catching two or three individuals can help trace the entire network, allowing authorities to apprehend more people."

He added, "Banks were instructed to establish monitoring teams, but this should have been done much earlier. When the blueprint for a Digital Bangladesh was created, such teams should have been put in place."

Zoha also noted, "The task force in MFS platforms will fail if it does not leverage technology. Effective monitoring requires using open-source intelligence and the Real-time gross settlement [RTGS] systems of MFS."

What do MFS providers say?

Muhammad Zahidul Islam, head of Media and Communication at Nagad, an MFS provider, said, "Nagad is never involved in such transactions. It carefully selects institutions for processing transactions through thorough verification. Therefore, it cannot process payments for any entity without a government license or approval."

He said, "For send-money or person-to-person transactions, neither Nagad nor anyone else can know the transaction's true purpose. Still, Nagad monitors all suspicious transactions and reports any doubts to the relevant government authority."

Shamsuddin Haider Dalim, head of Corporate Communications, bKash, said, "If transactions in any account appear suspicious, we voluntarily report it to the Bangladesh Financial Intelligence Unit (BFIU).

"bKash has essential technology and trained staff to regularly monitor and take required measures to prevent illegal transactions, including online gambling, hundi, money laundering, terror financing, as well as transfer to unauthorised apps."

"In addition, as part of a coordinated effort to prevent illegal transactions, we also provide necessary assistance to law enforcement agencies through regulatory authorities in any investigation.

"Based on information on suspicious accounts, the concerned authorities take action against the accused individuals as well as institutions," he added.

BB alone can't stop online gambling activities: Experts

Experts said that the Bangladesh Bank cannot single-handedly stop online gambling activities. The BTRC and law enforcement agencies must shut down these gambling websites, as the central bank lacks the authority and capacity to block or monitor them.

Md Arfan Ali, former managing director of Bank Asia, said, "Banks and MFS providers should establish transaction monitoring teams. These are illegal transactions, and weak monitoring systems increase their occurrence. Without proper oversight, detecting such transactions is difficult, so institutions should have dedicated teams to identify suspicious activity."

Toufique Ahmed Chowdhury, former director general of the Bangladesh Institute of Bank Management (BIBM), added, "Transactions take place through banks and MFS platforms.

Bangladesh Bank must take strict action regarding these transactions. Institutions themselves should maintain monitoring teams to detect suspicious activity."

He further noted, "The central bank lacks the capability to track where such transactions occur. Banks and MFS providers must identify gambling-related transactions, which law enforcement can then address."

To curb online gambling, a meeting was scheduled to be held yesterday (3 November) at BTRC, chaired by Foyez Ahmad Tayeb, CA's special adviser for the Ministry of Posts. 

The meeting will be attended by the director general of DGFI, the director general of the National Telecommunication Monitoring Centre, the director general of NSI, the director general of the National Cyber Security Agency, the additional IGP of CID, the director of Payment Systems at Bangladesh Bank, and several other senior officials from various departments.