Efforts on to freeze foreign assets tied to laundered funds in 6 months: Governor

Highlights:

• BB is working with int'l law firms, govt agencies, asset-tracing firms to identify and recover laundered assets
• Governor Mansur says repatriating frozen funds will be a complex and lengthy legal process
• That is why efforts are underway for out-of-court settlements with kleptocrats to bring back laundered money faster

Bangladesh Bank Governor Ahsan H Mansur has said that within the next six months, steps will be taken to freeze foreign assets linked to laundered money from Bangladesh as part of a wider initiative to recover illicit funds and promote financial accountability.

"The legal battle to repatriate the frozen funds would be complex and lengthy. It is not an easy task, but we are doing our best," he said while addressing a press briefing at the central bank's Chattogram branch today (11 April).

The governor said, "The concept of bringing back laundered money is very new to us. We are learning and consulting with international law firms and government officials in countries where we suspect large amounts have been laundered. We are also working with asset-tracing firms. Once we gather conclusive evidence, we will take steps to freeze those assets."

"We are also exploring alternative approaches. We're trying to repatriate these stolen funds through counseling and dialogue [out-of-court settlement] to avoid the lengthy legal process," he added.

The governor also discussed the central bank's economic performance, noting significant achievements in inflation control. 

Inflation eased, reserves stable

"Since assuming office, we've reduced food inflation from 14% to 8% and non-food inflation from 12% to 9%. This is a major achievement. We aim to bring food inflation down further to 5-6% by next year," Mansur said.

Despite external pressures, the Bangladesh Bank has managed to maintain stable foreign reserves. According to Mansur, this is largely due to a 26-27% increase in remittances and over 11% growth in exports over the past seven months.

"We have managed to maintain the gas supply by importing LNG on time, despite a shortage of foreign currency. We have ensured the supply of fertiliser by increasing imports. We have also controlled food inflation by reducing import duties and VAT," he noted.

Banks in recovery mode

Turning to the health of the banking sector, the governor acknowledged past issues related to money laundering but highlighted a turnaround. "Though a significant portion of funds was laundered, the banking sector has recovered thanks to strong policies and monitoring. UCB and Islami Bank Bangladesh have regained customer trust and no longer need liquidity support from the central bank," he said.

Mentioning that banks still struggling are under close monitoring and receiving policy support, the governor said, "If necessary, we will consider mergers."

Mansur assured the depositors' funds were safe. "No depositor will lose their money. The Bangladesh Bank took full responsibility. There is no reason to withdraw funds from banks."

He emphasised the importance of prevention in combating money laundering, announcing that senior bank executives will be trained to detect and stop such activities. "We believe prevention is better than cure."

Tk3 lakh crore laundered

In response to a journalist's question, the governor said nearly Tk300,000 crore had been laundered from Bangladesh, with around half allegedly linked to business groups based in Chattogram. He specifically named the Beximco Group as having laundered about Tk50,000 crore.

On the issue of internal corruption, Mansur stated that action would only be taken based on solid evidence. "If any central bank official is found guilty, we will take action. We welcome investigations by the Anti-Corruption Commission or any other agency, but we cannot act on speculation."

He also noted that several bank directors involved in irregularities have already been removed from their posts with positive results.

Banking training institute in Ctg on cards

In a final announcement, the governor revealed plans to establish an international-standard banking training institute in Chattogram. The facility will include accommodations for both trainees and trainers and aims to enhance professional development within the sector.

Executive Director of BB Chattogram Brunch Md Jamal Uddin, BFIU Director Md Anisur Rahman,
Directors of the Chattogram Office Md Salah Uddin, Md Arifuzzaman, Md Ashiqur Rahman, and Swaroop Kumar Chowdhury, were also present at the event, moderated by Deputy Director Md Zobaer Hossain.