Suspicious banking activities surge by 56% since July: Cenbank

Highlights

• Depositors need not worry about their money as govt to take over banks before merger
• Bringing back laundered money to take three to five years
• Business accounts frozen only based on credible complaint
• Cenbank steps won't harm businesses in any way

Bangladesh's banking sector has witnessed a sharp 56% surge in suspicious transactions and activity reports between July and May of the current fiscal year 2024-25, compared to the total for the previous fiscal year.

The Bangladesh Bank shared the information today (28 May) at a press conference held in the capital to release the annual report of the Bangladesh Financial Intelligence Unit (BFIU).

According to the BFIU, 27,130 suspicious transactions and activity reports were filed from July to May of FY25, compared to 17,345 during FY24.

"This could mean that suspicious transactions and activities rose after the Awami League government was toppled on 5 August last year in the face of a student-led mass uprising, following nationwide protests by students throughout July," states the report.

The BFIU also noted that suspicious reports in FY24 increased by 22.96% year-on-year.

Bangladesh Bank Governor Ahsan H Mansur attended the briefing, which was presided over by BFIU Head AFM Shahinul Islam.

During FY24, BFIU shared 114 financial intelligence reports with various investigative agencies and exchanged 1,220 information requests, representing a 13.91% increase over the previous year.

BFIU Director Muhammad Anisur Rahman presented the key highlights of the annual report through a PowerPoint presentation during the session.

The report also states that due to strengthened efforts to curb money laundering and terrorist financing, Bangladesh improved its position by 13 spots in the Basel Anti-Money Laundering (AML) Index 2024, now ranking 59th globally – a sign of the country's progress in combating illicit financial flows.

At the press briefing, Mansur said the government will take over weak banks before any merger.

Answering questions from journalists, he assured depositors that they do not need to worry about their money as they will be part of a strong bank.

The governor urged depositors not to withdraw money as their deposits will be 100% safe, thanks to the legal takeover by the government.

'Efforts on to bring back smuggled money from abroad'

Commenting on the process of bringing smuggled money back to the country, the governor said, "We are attempting to repatriate assets seized abroad. Our objective is to prevent these funds from moving to other countries."

He added, "Our legal measures aim to ensure that their funds remain frozen within the relevant jurisdiction."

The governor explained, "Foreign courts verify whether the money was acquired through legitimate means. If they believe the funds were brought from Bangladesh through corruption and we can prove it, then they will order their return to our country."

Mansur further said, "We are currently working with an individual who has 30 years of experience and is a top-tier global expert. They will be with us for six months, joining us to meticulously review each case. They will also assist in finding solutions by collaborating with officials from relevant institutions."

He urged all to work together for the betterment of the country. "Our goal should be to work together. If foreign assistance or funds are needed for the country, they should certainly be accepted, but simply complaining serves no purpose."

'Legal actions won't hamper businesses'

Regarding the freezing of business accounts, the governor said, "Since 5 August, business accounts have only been frozen if there was a credible complaint. All accounts were frozen following court orders. We have predominantly frozen personal accounts."

He continued, "From the very beginning, we understood that freezing institutional and individual accounts would create confusion among the general public. Therefore, we made a policy decision that we do not wish to harm businesses in any way. Instead, we aim to take legal action while maintaining the normal flow of business."

'$18-20b smuggled during AL regime'

Mansur said some $18-20 billion (equivalent to Tk2,19,600 crore to Tk2,44,000 crore) was siphoned off of the country during the Awami League's period in power. 

Expressing surprise, he said one individual alone purchased 350 houses, and these funds were smuggled out through bank loans. "These incidents have been uncovered, and the amount of money involved is increasing day by day."

Stating that bringing back laundered money is a new experience for Bangladesh, the governor said, "Efforts are underway to reduce bureaucratic complexities to accelerate the process of repatriating laundered funds. For this, changes will be brought to the law. Joint investigations are ongoing with eleven groups."

Mansur further said, "It will take three to five years to bring back the laundered money. Already, one individual's assets abroad have been seized, and more assets will be seized in the future. 

"Our objective is to create pressure on money launderers so that funds can be recovered outside of court proceedings. Our aim is not to harass anyone by sending them to jail, nor is it to shut down anyone's business. We have not closed anyone's business. If someone's business has been shut down, it has happened for other reasons."