ACC should establish a separate investigation cell

Massive programmes with long-term goals should  be undertaken with joint collaboration of the Anti-Corruption Commission (ACC) and other regulators, particularly Bangladesh Bank, Bangladesh Securities & Exchange Commission and National Board of Revenue (NBR) to deal with banking corruption. There should be a threadbare discussion with all stakeholders, especially with bank owners' association and the association of managing directors . They should be given reasonable time to ensure due control and strict compliance of rules and regulations. Banks and financial institutions also should establish their own surveillance. Nevertheless, the possibility of corruption cannot be ruled out.
If corruption is detected in spite of ensuring stringent rules and regulations, the ACC must investigate seriously and if found guilty, the institution should be heavily punished first and then its key management, particularly CEO and Chairman, must be held responsible. This kind of comprehensive measure can produce tangible improvement in eradicating corruption from not only financial sector but also from many other areas. However, this will, in no way, immunise individual corrupt officers and executives. The bankers, who are found to be indulging in corrupt practices in their own interest, must be dealt with very strictly.  
INVESTIGATORS WITH BANKING EXPERTISE: Banking is a specialised profession and special training and professional knowledge are imperative for providing banking services. A banker is developed through practical experience gathered by extensively working over the years. Mere theoretical knowledge cannot produce a good banker. Theoretical knowledge, coupled with extensive practical experience, can produce a good banker. Similarly, banking operation cannot be understood properly by anyone who does not have banking expertise . If the concept of banking, its various products and services, the role of various parties involved and, above all, the entire flow of banking operation cannot be understood, proper investigation of banking corruption cannot be conducted. Therefore, the ACC officers who will be assigned the task of investigating banking corruption must have good understanding about banking and procedures of banking operation.
During this writer's short banking career in Bangladesh, he had to face a very tough corruption investigation. The assigned officer was investigating the allegation of siphoning off the country's foreign currency through creation of forced loans. Since this allegation was related to export-oriented garments industry, very technical knowledge related to both import and export LC, payment of import bills, expatriation of export proceeds, handling of discrepant documents etc. was necessary. This kind of knowledge can be found only among competent bankers who have working experience in both credit and foreign trade departments. Unfortunately, the investigating officer did not have that expertise because he was not a banker at all. This scribe had to play an assisting role during his entire investigation tenure and he had to explain all pros and cons of international trade. However, because of this direct association, he was able to convince the investigator that we, at the branch level, were not involved with sanctioning of this loan and we just carried out the assignments given to us.
Therefore, if ACC is determined to crack down on corruption in the financial sector, it should establish a banking investigation cell where specially trained investigating officers will be employed. More importantly, if bankers with wide range of experiences in all areas of banking, particularly credit, international trade and operation i.e. general banking, can be appointed and posted in such a banking investigation cell, good result can easily be derived. This is not to undermine the capability as well as competence of the investigating officers of the ACC. However, special skill and knowledge to investigate special cases have no substitute.
PRIOR PERMISSION FOR INVESTIGATING BANKERS: Banking is always considered an essential service because service rendered by the bankers is related to economic activities. If a branch manager and sub-manager of a branch in a particular area are jointly arrested and if the branch cannot be operated in that area, the overall economic activity of that region will be badly affected. So, banking service is like other essential services. Keeping this in view, a banker has been given the status of a public officer in Bank Companies Act 1991 for which police cannot arrest a banker without warrant issued by a court.
While working in a bank in Bangladesh, this writer was given one special assignment to file the first information report (FIR) against a fraud which took place in his branch. As soon as he went to the nearest police station and expressed his intent to file FIR, the on-duty police officer attempted to arrest him without going into the details of the fraudulent activity although he was simply a carrier of that FIR. However, the officer-in-charge helped this scribe by instructing the officer that a banker cannot be arrested without specific warrant from the court. A similar practice for investigating banker should be introduced in ACC. Otherwise, if bankers are indiscriminately brought under investigation by ACC officers, a frightening situation will be created in this essential service industry and its consequential impact will be bad.
Measures must be taken to build confidence among bankers by ensuring that the ACC will launch investigation against a banker only when there is enough prima facie evidence that shows his direct involvement in corruption. There should be a practice in place that prior permission from the highest authority viz.the Commission or court is required to summon a banker or undertake investigation against corruption in banking. The Commission should grant permission when it is convinced that there is enough primary evidence of the person's direct involvement. By requiring prior permission from the highest authority, ACC's fairness, noble objective and transparency can be ensured and bankers will have confidence on the Commission so that they will not hesitate to extend full cooperation.
Corruption is one of the biggest challenges in the country's financial industry. In addition to siphoning off enormous amounts of money, huge amounts of NPLs (Non-Performing Loans) have been the result of corrupt practices in the sanctioning of loans. Moreover, today's rampant corruption is the result of last 50 years' corrupt practices which cannot be removed overnight. However, drive against corruption will have to be started from certain point and this starting-point may be the ACC Chairman's announcement of drive against corruption.
If a comprehensive long-term strategy is designed and measures are taken accordingly, corruption in banks, if not fully eradicated, can be reduced to an acceptable level. The ACC Chairman's warning is timely and praiseworthy but the Commission needs to take very careful measures.
The writer is a banker based in Toronto, Canada.
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