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Illegal cash: Financial intelligence asks banks to be on the alert

  • Published at 03:35 pm December 20th, 2018
taka Mehedi Hasan/ Dhaka Tribune
Stacks of Bangladeshi takaMehedi Hasan/ Dhaka Tribune

BFIU has directed banks to keep a close watch on imports and incoming foreign remittances

Bangladesh Financial Intelligence Unit (BFIU) has sent letters to banks operating across the country, directing them to be on the alert against possible inflows of illegal cash around the 11th parliamentary election.

The BFIU, which operates under Bangladesh Bank, has directed bank officials to keep a close watch on imports from countries listed as “risky”, and inflows of foreign remittances. The letter also asked the officials concerned to thoroughly scrutinize newly-opened import and export letters of credit.

Responding to a query, BFUI Chief Abu Hena Mohd Razee Hassan said: “There is a possibility that illegally-obtained cash will be used in the upcoming general polls. We directed the banks to remain on the alert, so that illegal cash cannot be used in an election.”

Previously, on December 17, the BFUI chief sent another letter to the bank asking them to be on the alert for signs of funding and transactions used by militant groups and individuals.

A letter was also sent to mobile financial services, directing them to treat cash transactions more cautiously and investigate suspicious online money transactions.

According to insiders, cash transactions have significantly increased in recent times due to the upcoming 11th general polls. Thus, the central bank has become concerned over the possibility of illegal cash transactions.

Commenting on the matter, former Bangladesh Bank governor Dr Salehuddin Ahmed said: “The import of capital machinery has increased, but investment has mostly stalled, in comparison. These imports might be concealing money laundering.

“This practice is quite common in Bangladesh during election time.”

According to Bangladesh Bank data, the 2017-18 fiscal year witnessed imports worth $54.46 billion—and 25% of it was capital machinery.

Addressing the issue, Policy Research Institute (PRI) Executive Director Dr Ahsan H Mansur said: “A large portion of the money that is being trafficked out of Bangladesh is transferred through capital machinery imports.

“Usually, these imports have a lower tax rate attached to them. Due to the uncertainty arising from the possible shift of power after the election, many resort to money laundering.”

Research conducted by Bangladesh Institute of Bank Management (BIBM) concluded the same. 

The research results showed that money is being laundered abroad under the guise of imports and exports. There are also indications that money from bank loans is being laundered.