Rise in dubious financial transactions concerning

FE Team | Published: February 23, 2024 21:04:17

Normally, an increase in the number and frequency of financial transactions is indicative of the growth of an economy. But it may also be that, far from being contributory, a certain proportion of the transactions is rather harmful to the economy. What the Bangladesh Financial Intelligence Unit (BFIU), a government agency that looks into money laundering and suspicious transactions including cash transaction reports, has reportedly found out recently in this regard lends more weight to the latter view on the dubious transactions. Going by the BFIU report, over the past five years, the number of suspicious transactions through banks and non-banking financial institutions (NBFIs) has increased by 294.79 per cent, where banks' share was 90 per cent. In the last fiscal year (FY 2022-23) alone, such transactions, according to the Suspicious Transaction Reports (STRs) and Suspicious Transaction Activities (STAs), increased by about 65 per cent compared to the previous fiscal year. The volume of cash involved in those reported transactions in FY 23 was to the tune of Tk 22.86 trillion, which was 8.0 per cent more than what it was in FY 22. Year-on-year, such transactions increased by 5.0 per cent and in absolute number it was 3.8 million.
Now the question is what is behind this increase in the transactions in cash at a time when the government wants to see that 75 per cent of the country's financial transactions take place electronically by 2027? According to the BFIU report under consideration, the actors behind such transactions are the entities and individuals who try to hide the sources and destinations of the money they earn through various illegal means. Those include criminal activities like corruption, hundi, fraudulence and forgery, human trafficking, sexual exploitation, extortion, drug dealing, etc. These are but traditional sources of illicit cash. But over the last decade, criminal activities using digital means such as online gaming, betting, dealing in foreign exchange and cyptocurrencies, etc. are also on the rise where the cash serves to conceal the illicit origin of the earnings.
However, the rise in the STRs and STAs does not necessarily mean that all the transactions involved are criminal in origin. What portion of the reported suspicious transactions is criminal can be determined only through conducting investigations into the specific cases of transactions. The BFIU provides government agencies like the National Board of Revenue (NBR), Anti-Corruption Commission (ACC), Criminal Investigation Agency (CID) with the reports on STRs and STAs. In fact, the rising number of transactions point to both the surge in the digital mode of financial transfers and increasing activities by the monitoring agencies. While it is appreciable that the agencies like BFIU have enhanced their job of monitoring activities, the question remain as to how far their work contributed to containing the colossal amount of money being regularly siphoned off the economy and laundered by transferring it outside the country through hundi, manipulated export and import and other illegal means?
It would be worthwhile to note here that according to the Global Financial Integrity (GFI) report of 2022, every year around Tk 640 billion worth of fund is annually taken out of Bangladesh through hundi, dubious international trade and other illicit routes. The destinations of the money thus stolen from the country as indicated in the GFI report included Singapore, Malaysia, Canada, the US, UK, Switzerland, UAE and Thailand. Let the BFIU report be followed up by the government agencies concerned for launching coordinated actions to bring an end to illicit transactions and transfer of the nation's financial resources abroad.