Roundtable discussion held on 'Safeguarding Trade Transactions and Prevention of Trade Based Money Laundering: Role of Correspondent Banks'

A half-day long online roundtable discussion was on Safeguarding Trade Transactions and Prevention of Trade Based Money Laundering: Role of Correspondent Banks held on 7 June.

Ahmed Jamal, chairman of BIBM Executive Committee and deputy governor of Bangladesh Bank was present in the roundtable discussion as the chief guest. Dr Ashraf Al Mamun, associate professor and director (Research, Development & Consultancy) of BIBM delivered a welcome address. Dr Md Akhtaruzzaman, director general of BIBM chaired the program.

A paper "Safeguarding Trade Transactions and Prevention of Trade Based Money Laundering: Role of Correspondent Banks" was presented in the program by Dr Shah Md. Ahsan Habib, professor (selection grade) of BIBM. Other members of the research team are Tofayel Ahmed, assistant professor of BIBM; Anila Ali, assistant professor of BIBM; Kamal Hossain, additional director of BFIU; Md Rokon-Uz-Zaman, joint director of BFIU; Brigadier General Md. Jahangir Alam of National Defense College of Dhaka; ATM Nesarul Hoque, senior vice president of Mutual Trust Bank Ltd.

The paper suggested banks be aware of greater security and compliance requirements. Banks must have regular RMA reviews of their all correspondent banking relationships, compliance is not only a technical but also an ethical issue, as noted in the paper.

In the keynote speech Dr Shah Md. Ahsan Habib said,  it is well-recognised that trade payments and financing techniques used in cross-border trade transactions have implications for TBML. Using open account and cash in advance is relatively risky from the point of TBML risks. Extensive use of LC and documentary collection in the country offer relatively better protection in the form of extensive control over the transactions by the banks and regulators. Correspondent banking relationships have greater roles and engagements in these methods. It is to be remembered that risk-prone correspondent banking relationships not only destroy the advantage of using these methods but also facilitate illicit fund flows and TBML through correspondent banking channels.

Md. Ali Hossain Prodhania, supernumerary professor of BIBM; Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank Ltd; Sazzad Anam, country representative of JP Morgan Chase, Bangladesh made comments as designated discussants. 

A good number of participants including senior bank executives, academicians, media representatives, and faculty members of BIBM took part in the online roundtable discussion.