BB Governor orders swift recovery of smuggled assets, warns against political interference

Bangladesh Bank (BB) Governor and Chairman of the Stolen Asset Recovery Taskforce Md Mostaqur Rahman has directed commercial banks to accelerate efforts to recover assets smuggled abroad, emphasising that protecting ordinary depositors' interests is a top national priority.

Speaking at a high level review meeting on Wednesday titled "Update of Civil Asset Recovery Status", the governor was joined by senior officials from the Bangladesh Financial Intelligence Unit (BFIU) and managing directors and focal points from affected banks.

During the session, Advisor Farhanul Ghani Chowdhury outlined a dual track legal strategy for asset reclamation. Criminal proceedings are being conducted on a Government to Government basis, targeting individuals for prosecution. 

Meanwhile, civil proceedings involve specialised international asset recovery firms and litigation funders and serve as the primary mechanism for actual monetary recovery of funds for affected banks, ensuring stolen capital is returned to the domestic financial system.

The taskforce reported progress in establishing international partnerships for cross border recovery. So far, 10 affected banks have signed 36 Non Disclosure Agreements with six international asset recovery firms. These agreements provide the legal framework for international experts to access sensitive bank data needed to trace, evaluate and secure assets in foreign jurisdictions.

While about 60 percent of the NDA process has been completed by affected banks, Governor Rahman noted that state owned commercial banks are lagging behind. He issued a stern directive for these institutions to immediately accelerate their participation in the NDA process.

All banks were also instructed to provide comprehensive loan default data and evaluations to international firms without delay to support the technical phase of recovery operations.

The civil recovery initiative is initially targeting high impact cases to restore bank liquidity. Based on intelligence regarding the largest volumes of defaulted loans and smuggled assets, six major industrial groups have been selected for the first phase of civil recovery. 

These groups represent the most significant portion of capital flight that has undermined the stability of the concerned financial institutions.

Governor Rahman stressed that the recovery of public funds is a matter of financial stability and economic accountability. 

He declared a zero tolerance policy for any political interference in the asset recovery process and instructed managing directors to contact him directly if they face external political pressure. 

He pledged to personally address such interference to safeguard the interests of banks.

Bank boards and managing directors must take full responsibility and play a proactive leadership role in managing civil proceedings for their respective institutions, he added.

Concluding the meeting, the governor outlined a broader roadmap for the taskforce. Upon successful completion of the first phase involving the top six defaulter groups, BB plans to launch a second phase targeting more than 100 additional cases of large scale asset smuggling and significant loan defaults, signalling a long term commitment to restoring discipline in the nation's banking sector.