Transparency International Bangladesh Seeks Beneficial Ownership Transparency Law to Save Country’s Ailing Banking Sector
Urgent Call for Action by Transparency International Bangladesh
In a press release issued on Monday, Transparency International Bangladesh (TIB) has urged the government to enact a law on beneficial ownership transparency and join the Common Reporting Standard, a global initiative aimed at preventing money laundering and combating terrorist financing.
Background: Banking Sector in Crisis
The country’s banking sector is reeling from recent allegations of massive loan scams involving thousands of crores of taka in three private banks, including Islami Bank Bangladesh. The irregularities have pushed the banking sector to the brink of collapse.
TIB Executive Director Speaks Out Against Irregularities
“The news of taking out thousands of crores of taka from several banks in the name of loans is very alarming for the economy of the country,” said Iftekharuzzaman, Executive Director of TIB. “A small customer has to provide a lot of documents to get a small loan, then how do fake companies get such big loans? The total amount of defaulted loans has risen six folds in the past 14 years. Even, the loans cannot be recovered for frequent changes in the definition of defaulted loans and rescheduling.”
TIB Criticizes Government’s Failure to Prevent Money Laundering
TIB also criticized the government’s failure to prevent money laundering, citing its decision to suspend sending relevant data to United Nations organizations as an attempt to hide the data.
Recommendations by Transparency International Bangladesh
- Enact a law on beneficial ownership transparency for private sector banks immediately
- Join the Common Reporting Standard, a global initiative aimed at preventing money laundering and combating terrorist financing
What is the Common Reporting Standard?
The Common Reporting Standard, developed by the Organisation for Economic Co-operation and Development (OECD), sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.
Conclusion
TIB’s call for a beneficial ownership transparency law and membership in the Common Reporting Standard comes after several recent high-profile loan scams, including the BASIC Bank scam and PK Haldar fraud. The organization is seeking greater accountability and transparency in the country’s banking sector to prevent similar irregularities from occurring in the future.