As Bangladesh Bank's (BB) enhanced vigilance and comprehensive reforms to tackle illegal cross border transaction, money launderers are now adopting increasingly sophisticated tactics, leveraging global networks and advanced technologies to evade detection.
In recent months, Bangladesh has witnessed a notable decline in money laundering activities, a development attributed to BB launched vigilance and comprehensive reforms in financial oversight.
The central bank has implemented stringent measures including heightened scrutiny of large transactions and high-risk accounts, alongside enforcing stricter compliance protocols across the country's financial institutions.
Preliminary data indicates a 20 per cent year-on-year reduction in suspicious transaction (STRs) between August and December 2024, marking a significant reversal following a 65 per cent surge in STRs during the fiscal year 2022-2023.
AKM Ehsan, Executive Director and Deputy Head of Bangladesh Financial Intelligence Unit (BFIU), attributes this decline to rigorous enforcement measures and closer collaboration with financial institutions.
The central bank has mandated enhanced due diligence (EDD) requirements, particularly focusing on politically exposed persons (PEPs) and sectors deemed at high-risk.
These measures have been extended to mobile financial services (MFS), with joint actions by BFIU and the central bank leading to suspension of over 48,000 MFS accounts linked to illicit transactions.
Financial regulators also frozen accounts involved in hundi operations, cryptocurrency trading, and online gambling, effectively disrupting these money laundering channels.
Banks are now required to submit monthly reports on suspicious activities and face penalties for non-compliance.
The Basel Anti-Money Laundering (AML) Index 2023 reflects Bangladesh's ongoing vulnerabilities, ranking the country as 46th among 152 nations, with a score of 5.80, indicating a high risk of money laundering and terrorist financing.
According to sources neighboring countries like Pakistan and Sri Lanka have achieved lower risk scores, standing at 5.44 and 5.42 respectively, underscoring the need for Bangladesh to intensify its efforts in combating financial crimes.
The BB governor Dr. Ahsan H. Mansur emphasized the significance of these efforts, stating, "Bangladesh Bank's proactive stance has not only reduced capital flight but also bolstered the country's global financial reputation."
However, he acknowledged the complexities involved in fully eradicating money laundering activities, given their evolving nature and the sophisticated methods employed by perpetrators.
Transparency International Bangladesh (TIB) has highlighted the substantial economic impact of money laundering on the country.
Dr. Iftekharuzzaman, Executive Director of TIB, revealed that Bangladesh was losing approximately $12 to $15 billion annually over the past 15 years due to illicit financial outflows.
He criticized previous regulatory bodies for their lack of action and emphasized the necessity for comprehensive reforms within financial institutions to effectively combat money laundering.
The central bank's renewed focus aligns with its broader agenda to restore confidence in the financial system reduced money laundering.
Experts caution that sustained vigilance and investment in advanced monitoring tools are critical to counter evolving money laundering threats.
The declining trend in money laundering underscores Bangladesh's commitment to financial transparency.
However, securing this progress requires unwavering dedication from banks, regulators, and enforcement agencies alike, a senior official in the central bank said.
As Bangladesh continues to strengthen its financial regulatory framework, the international community is closely monitoring its progress, he said.
The country's efforts to combat money laundering are not only crucial for its economic stability but also play a significant role in enhancing its global financial standing.
While the recent decline in money laundering activities is a positive development, it is imperative for Bangladesh to maintain and intensify its efforts.
BB official said continuous improvement in regulatory measures, coupled with technological advancements and international cooperation, will be essential in ensuring the integrity and transparency of the country's financial system.
