New financial sector issues are almost always brought on by economic expansion, and the scope and consequences of financial crime have increased significantly over the years because of technological advancement. And with the increase in financial crimes in the nation, Bangladesh is now faced with a severe problem.
Financial crime is a broad category of unlawful behaviour that includes, but is not limited to, money laundering, embezzlement, fraud, and bribery. In addition to adversely impacting the nation's economy, such crimes also reflect poorly on a country such as Bangladesh on the global stage.
The absence of efficient regulatory frameworks in Bangladesh is one of the key causes behind the surge in financial crime. Modern financial crime cannot be addressed by the rules and regulations in place because they are out-of-date and ineffectual. These rules and regulations require modification, and the government must also enact new ones that are appropriate for the present financial circumstances. The government should also supply the tools required to properly enact and enforce these rules and laws.
Corruption is a significant aspect that paves the way for financial crime in Bangladesh. Nearly every sector in the nation is afflicted with corruption, but the service industry is the worst. Approximately 71% of households (families) are victims of corruption in the service industry, according to Transparency International Bangladesh's (TIB) 2021 report. For a variety of services, each family was required to pay an average of Tk6,636 in bribes. The amount of bribes paid in the nation during the 12-month period from December 2020 to November 2021 was Tk10,830 crore.
These bribes were supplied to a total of 17 service sectors by regular citizens. The law enforcement agencies and the passport office were, at that time, the two most corrupt government entities in the nation. The research also notes that Tk671 is the average amount committed in bribes per capita in the nation.
The government must fight corruption vigorously and hold corrupt officials responsible for their misdeeds if it is to effectively combat financial crime. For this reason, the Anti-Corruption Commission's capacity needs to be expanded and its effectiveness raised.
The government should focus on training programs for law enforcement personnel, banking institutions, and other financial sector stakeholders in addition to these steps. These initiatives should emphasize recognizing and stopping financial crimes and find ways of looking into and prosecuting those who commit them.
In Bangladesh, preventing financial crime requires major participation from the private sector. To prevent financial crimes from occurring within their businesses, financial institutions must make sure they have reliable internal controls and risk management systems in place. Additionally, they must swiftly alert the proper authorities about any suspicious transactions.
Additionally, citizens have a big part to play in putting an end to financial crime in Bangladesh. Regular people like ourselves should be encouraged to report suspicious activities to the relevant authorities, such as the Bangladesh Financial Intelligence Unit, which is responsible for collecting, analyzing, and disseminating financial intelligence to combat money laundering and terrorist financing in Bangladesh.
A report by Global Financial Integrity claimed that Tk530,000cr ($50 billion plus) has been laundered from Bangladesh in the past 10 years and that Tk55,000cr (over $5.1 billion) is laundered annually. Since it is obvious that a significant quantity of money is being laundered out of Bangladesh, the BFIU's role as well as public awareness are crucial to fight this heinous crime.
The trial procedure in Bangladesh is one of the main obstacles to ending financial crime, that is it moves too slowly. In order to reduce criminal activity in the financial sector, the trial process must be of appropriate speed, needless to say. Coordination between the BFIU, Anti-Corruption Commission, the Attorney General's Office, and Bangladesh Securities Exchange Commission is of the utmost necessity for this matter.
Additionally, technical coordination between the Bangladesh Bank and the National Board of Revenue is of equal importance.
Financial crime is a serious issue in Bangladesh, a burgeoning economy, that calls for a coordinated effort from all interested parties to resolve it. The government must introduce new laws and regulations, enforce existing ones, and take a strong stance against corruption. Law enforcement personnel and financial institutions should undergo training, and the public should be urged to report any suspicious activity.
By putting in place reliable internal controls and risk management systems, the private sector must also play its part. By working together, Bangladesh can stop financial crime, safeguard its economy, and uphold its reputation internationally.
Md Harisur Rohoman is a freelance contributor.
