The amount of money deposited by Bangladeshi nationals in the Swiss bank has increased by Tk2,928 crore in just one year.
Bankers, economists and the people concerned think this situation is even worse if deposits in all other tax haven countries are taken into account.
According to the Swiss National Bank (SNB), at the end of 2021, the amount of money deposited by Bangladeshis in various banks in Switzerland stood at 871.1 million Swiss francs (CHF).
If the exchange rate of each Swiss franc is calculated at Tk95, then the amount will be Tk8,276 crore.
Just a year earlier, in 2020 the amount of money of Bangladeshis in Swiss banks was CHF 562.9 million or Tk 5,348 crore.
Meaning that the amount of money deposited by Bangladeshis in Swiss banks has increased by Tk2,928 crore or 55% year on year (YOY).
Such information has been disclosed in the annual report of the central bank of Switzerland.
However, in a recent post-budget press conference, Fazle Kabir, current governor at the Bangladesh Bank (BB), said 95% of the money that is reportedly laundered by Bangladeshis and deposited in Swiss banks is actually brought from other countries.
“We have not received any information that someone has deposited money in Swiss banks after smuggling it out of Bangladesh,” he noted.
The information about the amount of money deposited by Bangladeshis in Swiss banks has increased by 55% in one year came at a time when the government has taken an initiative to recover the money laundered through nominal tax.
In the proposed budget for FY23, Finance Minister AHM Mustafa Kamal has given an opportunity to bring back the money smuggled abroad with just a 7% tax raised widespread criticism in the country.
Bangladeshi tops the list among South Asian countries
The growth rate of the overall deposits from Bangladesh in Swiss banks was the highest among South Asian countries, followed by India with 50%.
In terms of the deposited figure, Indian money in the banks was the highest among South Asian countries, with 3,828.9 million CHF, while Bangladesh stood second, followed by Pakistan, Nepal, Sri Lanka, Afghanistan, the Maldives and Bhutan.
With a 10% increase, deposits by Pakistani citizens stood at 705.95 million CHF.
What experts are saying
Regarding the matter, Dhaka Tribune spoke to experts and economists, who have said that all the money deposited in Swiss banks isn’t laundered money as some also legally deposit money in various banks in the country.
Especially Bangladeshis living in different countries of the world including Switzerland keep money in different countries. Even when living abroad, using a Bangladeshi identity while depositing is counted as Bangladeshi money.
However, money is being smuggled from different countries to the country illegally.
Dr Saleh Uddin Ahmed, former governor of Bangladesh Bank, said this sudden jump in the deposits is bad for Bangladesh's economy as it is losing its monetary backing.
“If the money had been kept in Bangladesh, we could have invested it in various sectors,” he added.
The former governor further said Bangladesh should seek information from SNB on the deposits of Bangladeshis in Swiss banks.
He further said if we want to get information from the Swiss bank, we have to ask for it properly, which is not being sought and the concerned agencies have to work together in this regard.
Dr Debapriya Bhattacharya, distinguished fellow at the Center for Policy Dialogue (CPD) told the media: “From past experience and data, we have seen that money laundering from the country increases in the run-up to elections. In the past, trade capital was smuggled under the guise of trade. Now financial capital is being smuggled.”
Ashikur Rahman, senior economist at the Policy Research Institute (PRI) and a member secretary of Bangladesh Economists' Forum (BEF) told Dhaka Tribune: “Money laundering has always been a major problem for developing countries. However, it is being patronized by developed countries like the United Kingdom (UK) and the United States (US), especially since the 1970s as such money transactions have increased worldwide. Naturally, Bangladesh is no exception, however, I think that in order to stop money laundering we need to focus on a few more issues, not just by contacting Swiss banks.”
Describing the point he added: “First, to increase surveillance of third-party LCs because companies operating in different countries can import goods from one specific country by showing LC of the same company from another country.
Secondly, we need to keep a close eye on the money outflow sectors to see if the big money LCs are working properly.
Thirdly, the countries known as tax havens such as Bermuda, Luxembourg and Switzerland should be thoroughly reviewed while transacting with these countries.”
He also said that the activities of the Bangladesh Financial Intelligence Unit (BFIU) division of Bangladesh Bank need to be enhanced.
One-third of money in Swiss banks comes from UK and US
At the end of the last calendar year (2021), the largest deposits in Swiss banks were from individuals and organizations in the United Kingdom (UK) and the United States (US).
The highest amount of money is deposited by various individuals and organizations in the United Kingdom alone.
If the exchange rate of each Swiss franc is calculated at Tk95, the amount in Bangladeshi currency will be Tk 35,64,495 crore.
To put the figures in perspective, the size of the proposed budget of Bangladesh for FY23 is Tk 6,78,064 crore.
The second-highest amount of money in the Swiss bank after the United Kingdom is held by various individuals and organizations in the United States.
