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Dhaka Tribune

Anonymous transactions raise risk of money laundering

A lack of integration among different regulatory stakeholders is an important vulnerability parameter for amplifying further money laundering activities

Update : 10 Oct 2018, 10:27 PM

A survey conducted by the Bangladesh Institute of Bank Management (BIBM) has found that anonymous transactions are now considered to be the most vulnerable area for money laundering.

BIMB held a research workshop on Wednesday called “Money Laundering Vulnerabilities in New Payment Systems: Bangladesh Context” at the BIBM Auditorium, where they also said that proper selection of agents is the biggest challenge in MFS (Mobile Financial Service) and addressing money laundering through agent banking facilities. 

Deputy Governor of Bangladesh Bank Ahmed Jamal was chief guest at the workshop, chaired by Director General of BIBM Dr Toufic Ahmad Choudhury. BIBM Director (Training) Dr Shah Md Ahsan Habib  presented the keynote paper at the workshop. 

The paper “Money Laundering Vulnerabilities in New Payment Systems” said Hundi facility is using MFS as an effective channel for cross border transactions, which is illegal. Bankers identified smurfing as a smart approach to money laundering. In providing MFS, a lack of integration among different regulatory stakeholders is another important vulnerability parameter for amplifying further money laundering activities.

Dr Ahsan said unhealthy competition to enhance business through agent banking is one of the major causes of the wrong selection of agents. This ultimately leads to improper customer identification problems, which is another important vulnerable parameter for money laundering. Other parameters are lack of awareness, anonymous funding etc. 

“Awareness is the major solution for money laundering vulnerabilities in new payment systems like mobile financial services, online payment system, Electronic Wallet payment etc,” said Faruq Mainuddin Ahmed, managing director & CEO of Trust Bank Limited. 

“MFS contributes to only 6% of the total amount of payments in Bangladesh. Card payment systems contribute 1% of the total payments,” said Lila Rasid, general manager of the Payment Systems Department of Bangladesh Bank. 

Southeast Bank Limited Additional Managing Director S M Mainuddin Chowdhury, Bangladesh Bank General Manager & Operational Head (BFIU) Md Zakir Hossain Chowdhury, and iPay System limited founder and CEO Zakaria Swapan were present at the workshop.

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