[🇧🇩] Corruption Watch

[Saif]

Huge amount of money has been recovered from the house of Awami League leader Amir Hossain Amu.

 

[Saif]

Bangladesh Bank fails to address bank sector corruptions: BB dy governor

The Bangladesh Bank is responsible for addressing corruption and mismanagement in the banking sector, but it has failed to do so due to various reasons, including external influences, said deputy governor Kazi Sayedur Rahman on Tuesday...

www.newagebd.net

Bangladesh Bank fails to address bank sector corruptions: BB dy governor
Staff Correspondent 06 August, 2024, 17:51

Bank officials are seen working at a branch of a bank at Motijheel in the capital Dhaka on Tuesday. Banks opened on the day after remaining closed on Monday due to a general holiday. | Focusbangla photo

The Bangladesh Bank is responsible for addressing corruption and mismanagement in the banking sector, but it has failed to do so due to various reasons, including external influences, said deputy governor Kazi Sayedur Rahman on Tuesday.

The central bank will investigate corruption and money laundering issues and hold the corrupt accountable in accordance with the upcoming new government's directives, he added.

Sayedur made these comments during a meeting with the Economic Reporters Forum.

BB governor Abdur Rouf Talukder was absent on the first day after prime minister Sheikh Hasina resigned on Monday and fled the country, ending her 15-year rule amid an unprecedented student-led mass uprising against her authoritarian regime.

Sayedur said that the governor skipped office on the day due to mental stress.

On Tuesday, the Bangladesh Bank also lifted the restrictions on entering its premises for journalists.

Sayedur further said that the Bangladesh Bank was working on restructuring the banking sector and was ready to cooperate with the new government. Information will be shared with journalists as before, and there will be no restrictions on their entry, he assured.

On Tuesday, Bangladesh president Mohammed Shahabuddin dissolved the parliament following a high-stakes meeting with key stakeholders, including the chiefs of the three armed forces, leaders of various political parties, civil society representatives and leaders of Student Movements Against Discrimination.

Among others, BB deputy governors Nurun Nahar, Habibur Rahman, Md Khurshid Alam and executive director Mezbaul Haque were present in the meeting.

ERF president Refayet Ullah Mirdha and general secretary Abul Kashem, among others, were also present in the meeting.​

 

[Saif]

Money launderers will get no peace

Newly appointed Bangladesh Bank Governor Ahsan H Mansur yesterday announced that he would initiate tough measures against money launderers with international support so that “they are unable to live in peace”.

www.thedailystar.net

Money launderers will get no peace
Says BB governor

Ahsan H Mansur

Newly appointed Bangladesh Bank Governor Ahsan H Mansur yesterday announced that he would initiate tough measures against money launderers with international support so that "they are unable to live in peace".

Meanwhile, Finance Adviser Salehuddin Ahmed, in a separate programme, said names of several persons involved in financial crimes have come to light and steps have already been initiated against them.

Bank accounts of these people have been frozen, he told journalists after a meeting of a national coordination committee on anti-money laundering and counterterrorism financing at the finance ministry.

"Those who have smuggled the country's money abroad will not be allowed to sleep peacefully…on pillows of money," Mansur told a media briefing on his first day in office.

We will keep them in trouble irrespective of whether the money can be brought back or not, says Ahsan H Mansur

"Even if it is not possible to recover the money from them, at least they will be kept on the run as per the law," he said.

"International law is now helpful to some extent. It must be used. We will keep them in trouble irrespective of whether the money can be brought back or not. Hopefully we can do it," he said.

Mansur, an economist who had worked at the International Monetary Fund for about three decades, replaced Abdur Rouf Talukder who resigned last week amid protests.

He spoke on governance failures in the banking sector, one of the beleaguered areas of the economy.

"The central bank has a moral responsibility for banking governance as it's the custodian of the sector," he said.

Responding to a question about the alleged involvement of Bangladesh Bank officials in irregularities, he said the central bank to some extent was also responsible for the current sorry state of the banking sector.

"We will have to find the officials responsible, who were behind the corruption, and legal steps will be taken based on specific allegations through thorough investigations," said Mansur.

"We must restore good governance within the banking system, otherwise the sector will no longer yield anything good," he said.

Mansur said he would try to bring transparency to the system and help the markets with data and qualitative information.

He also shared his key priorities for the next 100 days. These include reining in inflation, increasing money flow and initiating reforms and bringing about discipline in the banking sector.

Talking about inflation staying persistently high, the governor said the key priority of Bangladesh Bank would be to control inflation.

He said the high inflation and the foreign exchange reserve crisis were the two "headline challenges" for the economy.

"And Bangladesh Bank's central responsibility is to control inflation," he said.

"We have to try to bring down the inflation rate as well as increase the level of foreign exchange reserves," he said.

The twin crises will not go away fully within a year but the utmost effort will be initiated to "normalise the situation as soon as possible".

Apart from that, Mansur said there are some major challenges for the economy as the whole financial sector has already collaged. But there is no silver bullet to immediately overcome the situation, he added.

"Our economic problems are deep and cannot be solved overnight," Mansur said.​

 

[Saif]

Extortion, a cause of high prices, sets alarm bells ringing

Just a day after a mass uprising toppled Sheikh Hasina’s government on August 5, a group of people, introducing themselves as activists of a major political party, visited an outlet of a leading footwear maker in Rangpur and demanded Tk 5 lakh in return for allowing the showroom to operate.

www.thedailystar.net

Extortion, a cause of high prices, sets alarm bells ringing

Just a day after a mass uprising toppled Sheikh Hasina's government on August 5, a group of people, introducing themselves as activists of a major political party, visited an outlet of a leading footwear maker in Rangpur and demanded Tk 5 lakh in return for allowing the showroom to operate.

The company declined to provide the sum, but the group warned they would come again.

The same day, a businessman running a joint venture factory in Chattogram's Anwara upazila, located more than 550 kilometres southeast of Rangpur, received a phone call from a person claiming to be a leader of the student front of a political party.

The caller demanded money from the businessman, hinting that there would be consequences if the amount was not paid.

Similarly, a group of people demanded Tk 10 lakh from a top official of a real estate firm in Savar, on the outskirts of the capital Dhaka. They threatened to set the firm's offices ablaze unless the money was given.

Such examples do not end here. Over the past week and a half since the political changeover, many businesses have complained of attempted extortion.

Such complaints reverberated at a conference organised by the business community on Wednesday.

Mir Nasir Hossain, a former president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said extortion was a longstanding concern.

Businesses present at the conference supported his allegations, shouting: "Right, right."

The allegations came several days after Home Affairs Adviser Brigadier General (retired) M Sakhawat Hussain warned extortionists by threatening tough action against perpetrators.

"I have requested the army chief to break your [extortionists] legs … I don't care, go to hell," he said.

"Whoever resorts to extortion -- no matter what party you are associated with -- I ask the people to give them a beating. Those who extort, catch them on the spot. We'll do what needs to be done. We'll restore law and order. The country cannot run like this. We cannot lease out the country."

Even during Hasina's tenure, businesses complained about extortion, a menace that has been blamed for increasing the cost of business and thereby contributing to hikes in the prices of commodities and essentials.

Businessmen said extortion occurred at all stages, from production to transportation and sales, significantly raising commodities prices.

It also reduces the competitiveness of exporters as their costs are raised without any value addition.

However, although businesses have taken a vocal stance against extortion over the years, no government has taken strict steps to curb it.

Instead, when the government changes, the baton of extortion is passed. This was reflected by the experiences of a street food seller in Mirpur's Rupnagar area.

"Some people came to me on Wednesday and said I would have to pay Tk 300 per day from now on," he lamented, adding that he paid Tk 50 per day to ruling party men during the Awami League government's tenure.

Risan Uddin, an apparel seller in the capital's Farmgate, said he had to pay Tk 500 per day to extortionists during the previous government's tenure.

He added that no one had attempted to extort him yet. He further said that some people came on August 7 to enquire about whether he had been facing any problems after reopening his shop. They asked him to inform them if any problem arose.

But judging from their tone, it seemed that they were laying the groundwork so that the money would flow to them in future.

"In fact, whichever party comes to power, we must pay. There is no other way."

Economists believe this is the perfect time to end the culture of corruption and extortion in the county, especially since the interim government has assumed charge in light of students' demand for reforms.

Sumon Howlader, president of the Bangladesh Poultry Association, said extortion was a major reason for the price hike of eggs and chickens.

He also complained that, alongside payments to local extortionists, they are also forced to provide bribes to police at various stages of transport.

"All extortion absolutely fuels costs, but that burden is ultimately passed onto the consumer while the businessmen bear some of the load," Howlader said.

Rashed Al Mahmud Titumir, a professor of Development Studies at the University of Dhaka, said: "When rent-seeking increases in an economy, the burden ultimately falls on people through higher prices of goods."

He also illustrated how this occurs.

"Rent-seeking occurs in many ways, such as by allowing cost-inflated development projects, lending to wilful defaulters using assets that are deposited by small depositors, and by grabbing rivers and forests. Politically influential players get many undue benefits," he said.

All these factors heighten the sufferings of general people. To save the economy from these unwarranted costs, a political change was necessary, and it has now been achieved, he added.

(Jagaran Chakma contributed to the story)​

 

[Saif]

Action to be taken against corruption ring surrounding Taqsem: Hassan Arif

AF Hassan Arif, adviser to the Ministry of Local Govt, Rural Development and Cooperatives, has said that a probe will be launched into the corruption network allegedly formed around sacked Dhaka WASA Managing Director Taqsem Khan. Taqsem's contract was terminated on Thursday following allegations

thefinancialexpress.com.bd

Action to be taken against corruption ring surrounding Taqsem: Hassan Arif
FE ONLINE DESK
Published :
Aug 15, 2024 21:08
Updated :
Aug 15, 2024 21:08

AF Hassan Arif

AF Hassan Arif, adviser to the Ministry of Local Govt, Rural Development and Cooperatives, has said that a probe will be launched into the corruption network allegedly formed around sacked Dhaka WASA Managing Director Taqsem Khan.

Taqsem's contract was terminated on Thursday following allegations of extending his tenure for 12 years through various means.

Addressing the media at the Secretariat on Thursday, Hassan stated that the information regarding Taqsem's corruption, including photographs and other evidence, has become public knowledge. "The corruption ring associated with him is still active, with some members either still operating or hiding. We will take legal action against those involved," he affirmed.

The adviser further emphasised the need to address systemic issues that create opportunities for corruption. "Wherever there is a large budget and extensive operations, the possibility of corruption arises. We must plug these loopholes. While we cannot undo the corruption that has already occurred, we will ensure that such incidents do not repeat in the future," he noted.​

 

[Bilal9]

Various media reports are now circulating which say that the former Hasina advisor Salman Rahman (popularly known as "Darbesh" because of his white beard) stole and misappropriated 36,000 Crore Taka (a little over US$ 3 Billion) from various state-controlled banks. He single handedly attempted to destroy the economy of Bangladesh

It has also been reported that one bank (Janata Bank) loaned him 25% of their entire loan portfolio!

https://www.dhakatribune.com/business/354940/how-salman-f-rahman-stole-36-865c-from-7-banks

 

[Saif]

Tk 45,000cr stuck in shady loans

Directors of eight private banks borrowed heavily from each other’s banks in reciprocal lending practices fraught with serious risks. Some banks went one step further and lent thousands of crores to relatives of these banks’ chairmen or directors.

www.thedailystar.net

Tk 45,000cr stuck in shady loans
Eight banks provide loans to directors of other banks in a murky practice, bringing significant risks to the entire sector

Directors of eight private banks borrowed heavily from each other's banks in reciprocal lending practices fraught with serious risks. Some banks went one step further and lent thousands of crores to relatives of these banks' chairmen or directors.

The loans going in and out of these eight banks for directors amounted to Tk 25,000 crore at the end of 2023, according to their financial reports analysed by The Daily Star. Apart from this, four of these lenders provided around Tk 20,000 crore to the relatives of the bank directors. That means the total reciprocal loans sanctioned for these directors and their relatives amounted to Tk 45,000 crore. Most of these loans changed hands in the last five years.

Over the last three months, The Daily Star analysed the financial reports of the 51 scheduled banks currently operating in Bangladesh and found that no other banks except these eight were engaged in such lending practices.

The banks are Exim Bank, Islami Bank, Social Islami Bank, National Bank, IFIC Bank, First Security Islami Bank, Union Bank and Global Islami Bank.

These banks are known for their questionable banking practices and were allegedly linked with the just-ousted Awami League government. During Sheikh Hasina's 15-year rule, powerful business groups with banking assets, including S Alam, Beximco, Nassa and Sikder Group, thrived on murky politics and bent rules, exposing the entire financial sector to serious risks.

The combined contribution of the eight bank directors in question to the lenders' paid-up capital is TK 2,400 crore, or about 5 percent of the Tk 45,000 crore loans they have taken from each other.

Most of these groups were not capable of getting loans if their business practices and financial health were taken into account, and so they lent reciprocally.

As the central bank rules prohibit the lending of a bank to its own directors, the directors deployed this cunning method. This trend is not new, but it spread in the banking sector in the last seven to eight years, officials said.

"As most of the bank owners are also successful in their own businesses, the central bank cannot prevent banks from lending to the owners of other banks," a banking analyst said.

According to a 2014 central bank circular, commercial banks can lend to their directors' firms up to 50 percent of their contribution to the paid-up capital.

Four of these banks declined to comment for this story, and two others said the loans were sanctioned under relevant laws. The Daily Star could not reach the two other banks.

Bankers say such reciprocal lending is risky for the relevant banks and the banking sector as a whole.

This type of borrowing indicates that these directors helped each other out with depositors' money as they would find it difficult to secure loans from other banks, they add.

Most of the loans were approved following the orders of the directors, and bank officials had nothing to do, according to three mid-level bankers at Islami Bank, Social Islami Bank and Exim Bank.

Requesting anonymity, they said several banks lent some companies large sums, in many cases multiple times their annual sales.

"So how will they repay the loans?" said one of the three bankers. His view was echoed by the two others.

'UNDUE BENEFITS'

Data show Islami Bank and Social Islami Bank started engaging in reciprocal lending in 2016 when these two banks were taken over by S Alam Group.

Exim Bank, National Bank, and IFIC Bank have already been involved in such lending practices for years, but on a limited scale. The size of such loans multiplied over the last 10 years.

When banks lend to relatives of their directors, they put the banks at risk since the financial strength of the borrowers is not seriously considered while sanctioning these loans, experts say.

These borrowers usually get undue benefits in taking loans, and repayment. Several banks are already facing risks because of such lending.

The financial statements of the companies in question should be analysed to see whether their assets and liabilities support the lending, Bangladesh Bank spokesman Mezbaul Haque told The Daily Star.

"If it is over-lending, the central bank will take action," he said.

EXIM BANK

Exim Bank provided Tk 8,115 crore, the highest amount of reciprocal loans, to several firms owned by directors of other banks. Of the amount, Tk 3,982 crore went to three companies owned by S Alam Group, whose chairman is Mohammed Saiful Alam, also chairman of First Security Islami Bank.

For its part, First Security Islami Bank lent Nassa Group, whose outstanding loan at the bank was Tk 734 crore at the end of 2023.

Nazrul Islam Mazumder, chairman of Exim Bank, himself took loans from most of these banks in the name of Nassa Group, which he owns. Nassa Group also secured loans from Islami Bank, where S Alam's son Ahsanul Alam is the chairman.

Exim Bank lent Tk 801 crore to Unitex Spinning and its associates, whose managing director Belal Ahmed is the chairman of Social Islami Bank (SIBL).

Nassa Group's outstanding loan to SIBL stands at Tk 651 crore.

Beximco and its various concerns' loan outstanding at Exim Bank was Tk 661 crore at the end of 2023. Beximco's Vice-chairman Salman F Rahman is also chairman of IFIC Bank. To IFIC Bank, Nassa Group's outstanding loan is Tk 637 crore.

Exim Bank lent Tk 2,671 crore to PowerPac Mutiara Keraniganj Power Plant, a sister concern of Sikder Group, controlled by Rick Haque Sikder and his brother Ron Haque Sikder. They had also directorships at the National Bank before they were forced out by the regulator.

Nassa Group's loan outstanding to National Bank was Tk 1,632 crore at the end of 2023.

Exim Bank's financial reports show Mazumder and his family contributed around Tk 250 crore to the paid-up capital of Exim Bank by holding 25 crore shares.

Under central bank rules, he is eligible to secure only Tk 125 crore (50 percent of the share value) of loans from the bank.

"This is a concentration of lending and this type of lending creates risks for a bank though this loan has not become defaulted yet," said Muhammad A (Rumee) Ali, a veteran banker.

"If any big borrower defaults, it would make the bank vulnerable. A good bank usually does not allow this type of lending due to such concerns," he said.

To avoid the loan concentration, the central bank rolled out a rule of a single exposure limit. But these banks have systematically dodged the rule by taking loans in the name of several firms.

"From the banking side, it is not difficult to find out who is the ultimate beneficiary of the loans, so they should be careful," said Ali, a former deputy governor of Bangladesh Bank.

SOCIAL ISLAMI BANK

Social Islami Bank (SIBL) provided loans of Tk 1,700 crore to directors of other banks, and its Chairman Belal Ahmed took loans from their banks. For instance, it lent Tk 1,049 crore to several firms of Infinia Group whose chairman is Ahsanul Alam, also chairman of Islami Bank.

In return, Islami Bank lent Tk 2,221 crore to two firms of Unitex Group whose managing director is Belal Ahmed.

Apart from these reciprocal lending, SIBL lent Tk 3,199 crore to several firms and sister concerns of S Alam Group. SIBL Chairman Belal Ahmed and S Alam Group's Saiful Alam are relatives.

Unitex Group holds around 4.5 crore shares in SIBL. This means the company's contribution to the paid-up capital of the bank is less than Tk 50 crore. Several relatives of S Alam also hold shares at the bank and their combined contribution to the bank's paid-up capital is around Tk 230 crore.

ISLAMI BANK

Islami Bank reciprocally lent Tk 4,333 crore to directors of other banks.

Apart from this, the bank's lending to S Alam Group's several firms alone stood at Tk 14,167 crore.

In Islami Bank, Ahsanul Alam, who is the bank chairman, and his relatives hold shares equivalent to Tk 350 crore of the bank's paid-up capital.

Since S Alam Group did not invest in Islami Bank in its own name, the bank has no legal binding in lending to the Group's companies.

OTHER BANKS

Similar practices were widespread at National Bank, IFIC Bank, First Security Islami Bank, Global Islami Bank and Union Bank.

National Bank for example lent Tk 7,080 crore to several companies whose owners are also directors of other banks. These loans were provided to Beximco Group, Nassa Group, and S Alam Group.

Sikder Group, in return, received loans from IFIC Bank, Exim Bank, and First Security Islami Bank.

Similarly, IFIC Bank lent TK 1,075 crore to Nassa Group and Sikder Group. In return, Beximco Group got loans from Exim Bank and National Bank.

IFIC Bank provided loans of Tk 1,020 crore to Sreepur Township Ltd, where Beximco is a joint venture partner.

Salman F Rahman and his son Ahmed Shayan Rahman hold 4.11 percent or 7.51 crore shares of the bank worth Tk 75 crore.

First Security Islami Bank provided those types of loans amounting Tk 2,442 crore.

Global Islami Bank and Union Group's reciprocal lending to each other was Tk 1,618 crore.

Several relatives of S Alam hold 30 crore shares at Global Islami Bank, meaning their investment is around Tk 300 crore in the bank. In Union Bank, S Alam Group holds shares worth Tk 570 crore.

The Daily Star first contacted most of these banks on June 15 and followed up with them on August 12-13. Representatives from National Bank, First Security Islami Bank, IFIC Bank, and Exim Bank did not respond or declined to comment.

Zafar Alam, chief operating officer at SIBL, said they sanctioned all loans in line with banking rules, and that the borrowers, including S Alam Group, are eligible for big loans.

Islami Bank CEO Mohammed Monirul Moula said they have been investing in Nassa Group and S Alam Group since the 1990s, and that the two groups' performance was excellent.​

 

[Saif]

Tk 3.11cr recovered from ex-senior secretary's house

Dhaka Metropolitan Police (DMP) recovered a huge amount of money, including local and foreign currencies worth around Tk 3.11 crore, from the house of a former senior secretary on Babar Road in the capital’s Mohammadpur area today

www.thedailystar.net

Tk 3.11cr recovered from ex-senior secretary's house

Photo: Collected

Dhaka Metropolitan Police (DMP) recovered a huge amount of money, including local and foreign currencies worth around Tk 3.11 crore, from the house of a former senior secretary on Babar Road in the capital's Mohammadpur area today.

The DMP informed the matter through a text message around 7:30pm today.

Based on a tip off, the DMP conducted a raid and recovered the money from house no. 29/2 and 29/3, Block F, Babar Road in Mohammadpur, according to the message.

DMP sources said the house belongs to Shah Kamal, former senior secretary at the Ministry of Disaster Management and Relief.

He served the ministry from 2015 to 2019 as secretary and from 2019 to 2020 as senior secretary.

According to DMP, it recovered around Tk 3.01 crore in cash, prize bonds worth Tk 74,400 and different foreign currencies including US Dollar worth Tk 10.03 lakh.​

 

[Saif]

Is dual citizenship to blame for money laundering?

“Is Bangladesh a place of looters?” – this question was raised by the High Court last month.

www.thedailystar.net

Is dual citizenship to blame for money laundering?
“Is Bangladesh a place of looters?” – this question was raised by the High Court last month.

VISUAL: TEENI AND TUNI

"Is Bangladesh a place of looters?" – this question was raised by the High Court last month. The court asked this question referring to a recent Bangla report, whose headline roughly translates to "Festival of purchasing properties abroad." The court's question is indicative of what is going on in the financial sector of Bangladesh right now. But to blame "dual citizenship" for the ever-growing culture of looting as well as money laundering may be inappropriate.

The act of earning a second citizenship in another country has never been a main contributor to trafficking funds overseas. While investigating the main reasons or avenues of illicit outflows of funds, not a single report of the US-based think tank Global Financial Integrity has blamed dual citizenship as a vital reason. Rather, dual citizenship has proven to be a boon to remittance inflows in Bangladesh, and those inflows rescued the economy from sliding into a full-scale disaster emerging from the dollar crisis.

As reports in February unveiled, the US is the top source of remittances to Bangladesh, surpassing Saudi Arabia and the UAE. The US requires residency or citizenship to allow Bangladeshi people to earn and send dollars to their home country. Other European countries that award citizenship to Bangladeshi people are gradually turning out to be increasingly reliable sources of remittance income. In contrast, Middle-Eastern countries are gradually losing their oil-based revenue because of the rise in green substitutes. These nations are comparatively restrictive in offering their citizenship to Bangladeshi workers. As a result, the relative share of remittance from these countries is dwindling.

The court's direction in framing causality may be mistaken. Dual citizenship is not the root factor for looting wealth from the country. It is the very "Bangladeshi style of rewarding for looting banks" that is to blame for the financial haemorrhage that Bangladesh is facing now. In the name of loan rescheduling, the general amnesty conferred upon the big defaulters by the central bank is a major reason why the act of looting has triggered a renaissance of stashing funds overseas of late. Recently, a former central bank governor commented that the concessions given to defaulters in this country have no parallel in any country or in history.

Of course, the looters are sometimes seeking dual citizenship under the "investment residency" quota in different countries by showing their enormous wealth, which they gained through the loose banking rules approved by the government. Getting citizenship in developed countries is hard and problematic for them, because those countries will ask for evidence of valid sources. These looters prefer parking their funds in countries where there are less queries. In the end, they park their ill-gotten money in the Swiss Bank which does not ask anything. Thus, allowing these looters to steal and get away with it in the first place is the root cause of looting, not dual citizenship.

Hundreds of cases on defaulted loans are pending with legal institutions, and there has been no exemplary punishment for those who plundered public money. That impunity induces the delinquent borrowers to acquire dual citizenship in order to protect their future overseas. The trend of money laundering as well as defaulting on loans is simultaneously rising since the government allowed extended family-based directorship in private banks in 2017. It invariably helped banks turn into private shops for siblings and cronies, and largely ruined the corporate culture. These institutional changes and privileges to the tycoons are at the root of money laundering. The tardiest legal system has refuelled the culture of looting. A former caretaker government adviser recently blamed court stay orders on big default cases – a process that has made the wound even worse.

The justices commented that dual citizenship holders have less responsibility towards the country as their hearts are divided. Thousands of students migrate to developed nations every year for higher studies. When they earn citizenship after getting jobs, they send money back to their families. They also enrich their birthplace by delivering their ideas, technology, and expertise – which economists define as trickle-down benefits. Many Bangladeshis migrate overseas through lotteries or family visas. They struggle a lot, but still send money back to their home country. By any means, these are not any instances of either less responsibility or divided hearts.

Forty-nine percent of all countries now allow dual citizenship and most of them are developed or middle-income countries. After understanding how beneficial dual citizenship can be for Bangladesh in an increasingly globalised world, the government on February 27 added another 44 countries on top of the existing 57 countries where Bangladeshis can get dual citizenship. This step deserves appreciation as timely and farsighted for a super-densely populated country like Bangladesh.

While Bangladesh appears to be liberal in allowing dual citizenship, both Pakistan and India are highly restrictive. But the amount of money laundered out of India or Pakistan is no less than that from Bangladesh. The 2021 Global Financial Integrity Report shows that Bangladesh lost the third highest quantity of trade-related outflows ($8.3 billion) after Pakistan ($8.5 billion) and India ($67.5 billion) annually over 2009-2018. The revenue loss was 17 percent for Bangladesh, 19 percent for Pakistan, and 20 percent for India. The nature of citizenship seems to have played no role in their case.

Poor governance in the financial sector, politicised interventions into banking affairs, allowing massive clemency to habitual defaulters, rewarding money launderers in the national budget and, finally, not punishing any big defaulters or stock market scammers are the main reasons why money laundering and buying properties abroad by a handful of bandits have skyrocketed. On February 6, the agriculture minister acknowledged the evolution of Begum Paras in Canada, US and Dubai. It has nothing to do with dual citizenship, which has been in place among nations for decades.

If anyone is politically pampered and plots to be a wilful defaulter, they needn't be overseas to remain safe. They are much safer in what the court labels as a "place of looters." If they can somehow manage a nomination for the next election, this place will turn into a "paradise of plundering" for them. Why would anyone care about dual citizenship then?

Dr Birupaksha Paul is a professor of economics at the State University of New York at Cortland in the US.​

 

[Bilal9]

Global Defence Corp. (a supposedly US-based thinktank) is reporting that Hasina, Rehana, Rehana's daughter Tulip (British MP) and Hasina's son Joy conspired with Russians (RosAtom, Russia's Nuclear plant builder) to embezzle close to 5 Billion through various offshore accounts at Malaysian banks.

Ousted Bangladesh’s Prime Minister Sheikh Hasina, Her Son Sajeeb Wazed Joy And Niece Tulip Siddiq Embezlled $5 Billion From Overpriced $12.65 Billion Rooppur Nuclear Power Plant Through Malaysian Banks

The long-cherished dream of having Bangladesh’s nuclear power plant began forming when Prime Minister Sheikh Hasina launched the main building construction phase in 2017. Nuclear power plants are e…

www.globaldefensecorp.com

Of course, if this is indeed true - one cannot blame RosAtom, they were probably forced into the lucrative deal by Hasina's insistence. It is also no secret that Hasina gave Indians complete access as contractors to the project, their people (RAW operatives) know the ins and oouts of the plant and its blueprints. The more I think about it - the more angry I get, what a traitor to the country this woman was, both politically and financially! All because Modi gave her assurances to let her stay in power!!

Rosatom - Wikipedia

en.wikipedia.org

@Saif bhai please keep me honest, I don't know if the source Global Defense Corp. is a legit entity.

 

[Saif]

S Alam group, Associates: Tk 95,000cr loans taken from 6 banks

S Alam Group and its associate companies took out Tk 95,331 crore between 2017 and June this year from six banks, with 79 percent of the sum coming from Islami Bank.

www.thedailystar.net

S Alam group, Associates: Tk 95,000cr loans taken from 6 banks

S Alam Group and its associate companies took out Tk 95,331 crore between 2017 and June this year from six banks, with 79 percent of the sum coming from Islami Bank.

This amount is equivalent to 5.78 percent of the banking sector's total outstanding loans as of March.

However, the total amount taken from these six banks is likely higher, according to Bangladesh Bank and bank officials with knowledge of the matter.

Documents pieced together by The Daily Star show that most of the loans were taken by bypassing banking rules and regulations, which is a testament to how the Chattogram-based conglomerate exerted its influence on the country's banking sector.

Founded in 1985 by Mohammad Saiful Alam, a relative of former Awami League politician Akhtaruzzanan Chowdhury Babu and former Land Minister Saifuzzaman Chowdhury, S Alam Group has grown into one of the largest conglomerates in Bangladesh.

For example, within one month of opening an account with Islami Bank's Chaktai branch in Chattogram, a modest corrugated tin seller Murad Enterprise was given Tk 890 crore without even verifying the need for the funds and the company's financial capacity to pay back the sum.

A year later, another loan of Tk 110 crore was given to the company, which turned out to be a shadow company of S Alam Group, BB documents show.

What is worse is that the bank, where S Alam Group has controlling stakes, took very little collateral from Murad Enterprise.

The conglomerate and companies with ties to it took Tk 74,900 crore from Islami Bank, whose chairman since June last year is Alam's eldest son Ahsanul Alam.

Of the amount, Tk 26,000 crore was borrowed in the name of its subsidiaries, and the remaining amount was in the name of 29 associate companies, such as Nabil Group, Desh Bandhu Group, Unitex Group, and Anantex Group.

Islami Bank's Khatunganj branch in Chattogram is particularly noteworthy: a staggering Tk 35,924 crore was taken from the branch through 10 companies, documents show.

S Alam Group and its shadow companies, such as Nabil Foods, Nabil Auto Rice Mills, MS AJ Trade International, and Anowara Trade International, secured loans amounting to Tk 29,575 crore from the Rajshahi branch of Islami Bank.

Another Tk 23,900 crore was taken from Islami's offshore banking unit and other branches over the years in violation of rules.

Rules were also not followed by state-run Janata when extending loans to the business giant, whose interests range from commodity trading to fishery, from construction materials to real estate, from textiles to media, from intercity buses to shipping, and from power and energy to banks and insurance.

S Alam Group and its affiliate companies took Tk 13,400 crore from state-run Janata Bank.

About Tk 10,449.45 crore was taken in the name of S Alam subsidiaries, with as much as 90 percent of the loans taken from Janata's Sadharan Bima Corporate Branch in Chattogram.

The remaining Tk 2,950.55 crore was taken from Janata by its associate companies.

Janata's lending to S Alam Group breached the bank's single borrower exposure limit by an alarming margin.

According to banking law, a bank is prohibited from lending more than 25 percent of its paid-up capital to a single party. At the end of June this year, Janata's paid-up capital stood at Tk 2,314 crore.

Some Tk 4,200 crore was taken from Social Islami Bank (SIBL), whose chairman Belal Ahmed is Alam's son-in-law. Five more relatives of Alam are on the board of SIBL.

Some Tk 2,000 crore was taken from Union Bank, whose board consists of Alam's siblings Halima Begum, Osman Goni, and Md Rashedul Alam and his wife Marzina Sharmin. Their nephew, Mohammad Mostan Billah Adil, is also on the board.

S Alam Group and its associate companies took Tk 574 crore from Global Islami Bank (GIB), whose vice-chairman is Alam's daughter Maimuna Khanam. Seven other relatives of Alam, including his brother Shahidul Alam and sister Rokea Yasmin, are on the board of the 11-year-old bank.

Some Tk 257 crore was taken from First Security Islami Bank (FSIBL), whose chairman is Alam himself. Alam's wife, Farzana Parveen, and four other relatives are on the board of FSIBL.

If the loans taken by its associate companies are added, the total amounts taken from SIBL, FSIBL, Union, and GIB will go up, according to industry insiders.

In light of the gross irregularities, the BB yesterday restricted the lending activities of the banks save for Janata.

Alam; Subrata Kumar Bhowmik, executive director of S Alam Group; the managing directors of the six banks; and BB spokesman Md Mezbaul Haque could not be reached for comment.​

 

[Saif]

6 banks with ties to S Alam barred from lending

The Bangladesh Bank restricted six banks linked to S Alam Group from lending activities to prevent their situation from deteriorating further amid allegations of wrongdoing.

www.thedailystar.net

6 banks with ties to S Alam barred from lending

The Bangladesh Bank restricted six banks linked to S Alam Group from lending activities to prevent their situation from deteriorating further amid allegations of wrongdoing.

Experts say the restriction may help boost liquidity in the six cash-strapped banks, which were all running their activities by taking special liquidity support from the central bank.

The banking regulator made the decision yesterday through a letter sent to the banks, namely Islami Bank Bangladesh, First Security Islami Bank, Social Islami Bank, Union Bank, Global Islami Bank, and Bangladesh Commerce Bank.

However, the lenders will be able to disburse agriculture loans, SME loans against deposits, and loans under incentive packages up to Tk 5 crore, the BB letter added.

In order to provide loans above Tk 5 crore, the respective bank will have to get prior approval from the central bank.

It also prohibited the six banks from rescheduling any previous loans until further notice.

Alongside that, they cannot extend or increase exisThe central bank also ordered the six banks to submit monthly repayment data of its 20 largest borrowers.

"The decision was taken in order to protect further deterioration of the banks, and protect depositors' funds," the letter sent by the central bank read.

The central bank passed the order to bring discipline to the banks, said Syed Mahbubur Rahman, a former chairman of the Association of Bankers, Bangladesh (ABB), adding that such policies had previously been issued for state-run banks.

As the banks have some liquidity issues, it may help improve the situation, he said.

The liquidity coverage ratio (LCR) of Islamic banks in Bangladesh tumbled to 58.7 percent at the end of last year from 87.7 percent in 2022 and 188.5 percent in 2021, according to a report released by Fitch Ratings, an American credit rating agency.

Excess liquidity in the sector plummeted to Tk 1,518 crore at the end of March this year, a 91.3 percent drop compared to September of 2022.

These six banks have long been battling a liquidity crisis. As such, they were utilising the central bank's special liquidity support until last week, when the central bank cut that facility.

Aside from liquidity issues, the banks are also contending with high amounts of non-performing loans (NPLs). The total bad loans of the six banks rose around 8 percent year-on-year to Tk 9,674 crore in 2023.

"We also restrict lending by some branches when we see that the NPLs of the branches are high. This is a common practice to bring back discipline," added Rahman, who is also managing director and CEO of Mutual Trust Bank.

In recent weeks, several reports have come out indicating that Mohammad Saiful Alam, the owner of S Alam Group, borrowed large amounts from these six banks using companies that exist only on paper.

Most of these loans may sour, according to experts.

There are 10 Shariah-based banks in Bangladesh, with five owned by the S Alam Group.

A top official of a leading bank said such restrictions may improve the banks' situation.

However, he cautioned that it may impact Shariah-based financing in the country as half of the Islamic banks will remain out of financing activities.

"Let the banks survive first and set aside worries about its impact on Shariah-based banking for this moment," the official said.

"There are five other Shariah-based banks in the country and two of them are doing well. So, people can go to those banks for loans in the meantime. The restriction will not remain year after year, so they will come back soon."

If the banks cannot survive, Shariah-based banking will be squeezed. So, this is a good decision, he said.

The banker hoped the banks would bounce back strongly after structural reforms and contribute to Shariah-based banking again.

As of 2023, Islamic banking assets accounted for over 25 percent of the overall banking sector's assets in Bangladesh.

However, despite impressive growth and potential, the sector has been facing a significant crisis since the middle of 2022 due to loan irregularities, scams and a lack of good governance at some Shariah-based banks.

The deposit growth of Islamic banks plummeted to 2.9 percent year-on-year in 2022 from 20.1 percent the year prior, according to the central bank's Financial Stability Report 2022.​