[🇧🇩] Corruption Watch
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The relation between corruption and remittance
Many are sympathetic towards migrant workers for justifiable reasons.
The relation between corruption and remittance
VISUAL: FATIMA JAHAN ENA
Many Bangladeshis seek employment abroad due to limited job opportunities and economic conditions at home. The overseas employment sector has become a vital source of income for many families and contributes significantly to the national economy.
Workers employed overseas send money back home to support their families. This money, known as remittance, plays a crucial role in the Bangladeshi economy. It is a primary source of foreign currency and helps improve the living standards of many households. Remittances contribute to consumption, investment, and savings in the local economy. A high level of remittance inflow strengthens the forex reserves, which are essential for maintaining the stability of the national currency (taka), managing international trade, and ensuring the country can meet its foreign obligations.
"Corruption" on the other hand hurts the economy in more ways than one. In most cases, perpetrators resort to corrupt practises for their individual financial gains at the expense of the national economy. Therefore, it is important for the corrupt to secure the wealth accumulated through corruption. Gone are the days when black money was kept hidden inside mattresses—the enormity of modern-day scams involving thousands of crores of taka renders that option impractical today. Syphoning the money out of the country is the safest way now to protect the loot, and this is where "corruption" is linked to "remittance."
Those who want to send black money out of the country, need someone who will receive Bangladeshi taka inside the country, in return for foreign exchange handed over abroad. Bangladeshis working abroad are ideal partners for this transaction. These two parties, namely corrupt politicians, government officials, and businessmen on one side and migrant workers on the other, get connected by the "hundi" operators. Hundi is an informal method of transferring money, often used by migrant workers to send remittances back home as well as to transfer illegally accumulated wealth out of the country by the crooks. It is a faster and cheaper alternative to formal banking channels and operates outside the regulatory framework.
Hundi traders also offer services like collection and distribution of fund any time and at any location, short term credit, etc. The main reason migrant workers prefer hundi to official banking channels is because they get a better exchange rate than the official rate. That is why many recommend improving the official rate by bringing it close or equal to the unofficial (hundi) rate as a means to combat illegal transfer of money across the border.
However, "special exchange rates" and incentives to remittance earners have been introduced to no avail. Because, to the corrupt money launderer, the loss incurred due to difference in exchange rate is of little significance; protecting illegally amassed fortune and his/her goodwill are far more important. Therefore, no matter how much the exchange rate for the remittance earner is improved, hundi operators will offer an even better rate.
Many are sympathetic towards migrant workers for justifiable reasons. Migrant workers earn foreign currency staying separated from relatives/friends for lengthy periods, living in difficult conditions, combatting many adversities. Many may ask, "Is it a big deal, if they get a taka or two more for their hard-earned foreign currency opting for informal channels?" Some of them incorrectly think that the foreign exchange is entering Bangladesh, even if the informal channel (hundi) is used to remit the fund. People might also argue that it may not be going in the hands of the government if official banking channels are not used, but is added to local economy anyway. Maybe they do not realise that the US dollar or other foreign exchange earned by migrant workers do not enter Bangladesh at all, if sent through informal channels. Rather, it goes in the hands of corrupt individuals and groups who accumulate wealth illegally and remain abroad. The corrupt parties just hand over their accumulated wealth (taka) to relatives/friends of migrant workers living in Bangladesh, with the help of hundi operators. In effect, politicians and government officials resorting to bribery, businessmen defaulting on bank loans, importers avoiding duty by under-invoicing, smugglers dealing in restricted/banned substances get to enjoy a safe and convenient conduit to transfer their illegal wealth to a safe haven.
If hundi is the "vehicle" to transfer black money, "corruption" provides its fuel. While curbing corruption is a long-term process, following measures may prove to be effective in the short to medium term.
Creating awareness among all concerned, especially migrant workers, as to how hundi is not only depriving country of foreign currency earned abroad, but also encouraging corruption and providing a safe route to take illegal wealth out of the country.
A more effective measure could be to promulgate laws which will make it mandatory to bring in a certain percentage of migrant workers' income through official channel. The percentage amount should be determined by the Bureau of Manpower, Employment and Training (BMET) or any other competent authority after careful analysis of every worker's income, expenditure, savings and remittance pattern. Non-compliant workers may be held accountable when they return to Bangladesh. And in extreme cases, their NOCs may be cancelled and they may be barred from going abroad again for employment. Such measures may sound harsh, but one should remember that those who resort to hundi cause grave damage to the economy by facilitating corruption.
Mir Ashraful Hossain is the director and group COO of Urmi Group.
VISUAL: FATIMA JAHAN ENA
Many Bangladeshis seek employment abroad due to limited job opportunities and economic conditions at home. The overseas employment sector has become a vital source of income for many families and contributes significantly to the national economy.
Workers employed overseas send money back home to support their families. This money, known as remittance, plays a crucial role in the Bangladeshi economy. It is a primary source of foreign currency and helps improve the living standards of many households. Remittances contribute to consumption, investment, and savings in the local economy. A high level of remittance inflow strengthens the forex reserves, which are essential for maintaining the stability of the national currency (taka), managing international trade, and ensuring the country can meet its foreign obligations.
"Corruption" on the other hand hurts the economy in more ways than one. In most cases, perpetrators resort to corrupt practises for their individual financial gains at the expense of the national economy. Therefore, it is important for the corrupt to secure the wealth accumulated through corruption. Gone are the days when black money was kept hidden inside mattresses—the enormity of modern-day scams involving thousands of crores of taka renders that option impractical today. Syphoning the money out of the country is the safest way now to protect the loot, and this is where "corruption" is linked to "remittance."
Those who want to send black money out of the country, need someone who will receive Bangladeshi taka inside the country, in return for foreign exchange handed over abroad. Bangladeshis working abroad are ideal partners for this transaction. These two parties, namely corrupt politicians, government officials, and businessmen on one side and migrant workers on the other, get connected by the "hundi" operators. Hundi is an informal method of transferring money, often used by migrant workers to send remittances back home as well as to transfer illegally accumulated wealth out of the country by the crooks. It is a faster and cheaper alternative to formal banking channels and operates outside the regulatory framework.
Hundi traders also offer services like collection and distribution of fund any time and at any location, short term credit, etc. The main reason migrant workers prefer hundi to official banking channels is because they get a better exchange rate than the official rate. That is why many recommend improving the official rate by bringing it close or equal to the unofficial (hundi) rate as a means to combat illegal transfer of money across the border.
However, "special exchange rates" and incentives to remittance earners have been introduced to no avail. Because, to the corrupt money launderer, the loss incurred due to difference in exchange rate is of little significance; protecting illegally amassed fortune and his/her goodwill are far more important. Therefore, no matter how much the exchange rate for the remittance earner is improved, hundi operators will offer an even better rate.
Many are sympathetic towards migrant workers for justifiable reasons. Migrant workers earn foreign currency staying separated from relatives/friends for lengthy periods, living in difficult conditions, combatting many adversities. Many may ask, "Is it a big deal, if they get a taka or two more for their hard-earned foreign currency opting for informal channels?" Some of them incorrectly think that the foreign exchange is entering Bangladesh, even if the informal channel (hundi) is used to remit the fund. People might also argue that it may not be going in the hands of the government if official banking channels are not used, but is added to local economy anyway. Maybe they do not realise that the US dollar or other foreign exchange earned by migrant workers do not enter Bangladesh at all, if sent through informal channels. Rather, it goes in the hands of corrupt individuals and groups who accumulate wealth illegally and remain abroad. The corrupt parties just hand over their accumulated wealth (taka) to relatives/friends of migrant workers living in Bangladesh, with the help of hundi operators. In effect, politicians and government officials resorting to bribery, businessmen defaulting on bank loans, importers avoiding duty by under-invoicing, smugglers dealing in restricted/banned substances get to enjoy a safe and convenient conduit to transfer their illegal wealth to a safe haven.
If hundi is the "vehicle" to transfer black money, "corruption" provides its fuel. While curbing corruption is a long-term process, following measures may prove to be effective in the short to medium term.
Creating awareness among all concerned, especially migrant workers, as to how hundi is not only depriving country of foreign currency earned abroad, but also encouraging corruption and providing a safe route to take illegal wealth out of the country.
A more effective measure could be to promulgate laws which will make it mandatory to bring in a certain percentage of migrant workers' income through official channel. The percentage amount should be determined by the Bureau of Manpower, Employment and Training (BMET) or any other competent authority after careful analysis of every worker's income, expenditure, savings and remittance pattern. Non-compliant workers may be held accountable when they return to Bangladesh. And in extreme cases, their NOCs may be cancelled and they may be barred from going abroad again for employment. Such measures may sound harsh, but one should remember that those who resort to hundi cause grave damage to the economy by facilitating corruption.
Mir Ashraful Hossain is the director and group COO of Urmi Group.
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Countering threats from exploiters of national resources
Ever since the takeover of the country's reins by the interim government, well wishes, congratulatory messages, assurances of cooperation and assistance, moral and material support have been showered profusely from all corners of the world. One of the reasons behind the surfeit of cordiality expres
Countering threats from exploiters of national resources
Nilratan Halder
Published :
Sep 19, 2024 21:32
Updated :
Sep 19, 2024 21:32
Gen Z Revolution in Bangladesh A Beacon of hope for global justice
Ever since the takeover of the country's reins by the interim government, well wishes, congratulatory messages, assurances of cooperation and assistance, moral and material support have been showered profusely from all corners of the world. One of the reasons behind the surfeit of cordiality expressed is Nobel laureate Dr Yunus's international connection and familiarity with important people the world over, particularly in the US where the Clintons were and still are well disposed towards him.
After the initial issuance of congratulatory notes and expression of warmth, now comes the turn for generous financial commitments. During the US interagency delegation's recent visit to Bangladesh, the USAID signed a development agreement worth US$200 million with the interim government. Now the World Bank (WB) has announced it will provide $3.0 billion in aid this year and the Islamic Development Bank (IsDB) pledges to make available a loan amounting to 4.0-5.0 billion in three years. The Asian Development Bank (ADB) pledged a loan of $800 million for the 2024-25 budget support during the tenure of the deposed government. This was done to help Bangladesh smoothly graduate from the least developed status and most likely it will stand by its commitment. The International Monetary Fund (IMF) approved its third tranche of its $4.7 billion loan programme in June last but not before it made the availability of the third and fourth tranches conditional to compliance of 33 obligations. Now clearing the way for the fifth tranche may not be difficult.
All this shows that the country's plunge into a crisis of Sri Lanka's order is most unlikely. Money, greenback to be precise, is finding its way into the country to the relief of the interim government. But the appearance of the financial bonhomie may be deceptive. In this connection, Finance and Commerce Adviser Dr Salehuddin Ahmed's straightforward demand for making the WB's conditionalities implementable is worth noticing. Notably, by the end of a month after the interim government's inauguration, it has sought budget support of $1.0 billion from the WB.
The streams of loan packages already made available and committed are sure to please quarters well beyond the team now at the helm of state affairs. Some of the foreign credits are most likely to be used after this government leaves office. Bangladesh's external debt has crossed $100 billion mark lately. Per capita foreign debt by March this year was Tk150,000--- a rise of Tk50,000 within three years, according to a local news agency. It should shoot up further now. The fresh doses of foreign debt burden are likely to enmesh the country in an intractable wider net not just of credit but also of commercial and political makeup.
Bangladesh's importance as a theatre of clashes of big powers' interests in South Asia cannot be overemphasised. Its importance has further enhanced with the prospect of exploiting the blue economy in the Bay of Bengal. So the powers are vying for taking it under their geo-political spheres of influence. Gone are the days of blatant way of doing so by instigating or staging military coups. This has been replaced by the behemoths of multinational companies that channelize capitals from around the least developed markets for accumulation. The recipe of tailor-made democracy hardly serves the recipient country and least of all its people.
The hidden agenda of accumulation of capital often miss the debate over democracy in the Third World. But the facts are cruel. Globalisation has reshaped patterns of production, consumption and commerce on a global scale. Of the largest 100 economies in the world, 51 were corporations and 49 countries before 2000, according to Sarah Anderson and John Cavanagh of the Institute of Policy Studies, a US think tank. The combined sales of 200 corporations were bigger than the combined economies of all countries minus the top 10. With rising clouts of the MNC goliaths, their share is likely to be greater by this time. There are complaints that big powers implements their political ambition through these corporations that control natural resources in African, Asian and Latin American countries by way of investments in development and industrialisation or activities like extraction of oil or gas and mining. Agreements are made overwhelmingly favouring the MNCs courtesy of greedy and unpatriotic elements ready to advance personal gains. Multilateral lending agencies are not unwilling to promote their agenda.
It is exactly at this point the core issue of the anti-discrimination movement encounter a formidable challenge not only from the corrupt and derelict political parties at home but also from the MNCs which are not ready to let go their grip on their business interests. The fracas over Scimitar's gas and oil exploration in Jalalabad, Sylhet can be cited as an example of how things can fall foul on casual approach to defending national resources. Committees formed recently to evaluate various agreements on projects may dig out scams involving advancement of personal or coterie gains at the cost of national interests.
A views exchange meeting on "Toward a Non-Discriminatory Bangladesh: Youth Manifesto" voiced on Tuesday last the concern about perpetuation of the culture of exploitation not sparing even the university dormitories. New generation youth leadership resents this and has rightly demanded young leaders' inclusion in business and politics. But the odds are stacked against them. They will have to stay alert and confront the combined power of outdated but entrenched political forces and the multinational corporate biggies along with their local subservient partners in business and bureaucracy. But the unalloyed sincerity of their purpose and commitment to a sacred cause of fighting for well-being of the nation is their most potent weapon. The generation Z (Gen Z) should beat off the commercial collusion of MNCs much as those may be more powerful than their governments.
Nilratan Halder
Published :
Sep 19, 2024 21:32
Updated :
Sep 19, 2024 21:32
Gen Z Revolution in Bangladesh A Beacon of hope for global justice
Ever since the takeover of the country's reins by the interim government, well wishes, congratulatory messages, assurances of cooperation and assistance, moral and material support have been showered profusely from all corners of the world. One of the reasons behind the surfeit of cordiality expressed is Nobel laureate Dr Yunus's international connection and familiarity with important people the world over, particularly in the US where the Clintons were and still are well disposed towards him.
After the initial issuance of congratulatory notes and expression of warmth, now comes the turn for generous financial commitments. During the US interagency delegation's recent visit to Bangladesh, the USAID signed a development agreement worth US$200 million with the interim government. Now the World Bank (WB) has announced it will provide $3.0 billion in aid this year and the Islamic Development Bank (IsDB) pledges to make available a loan amounting to 4.0-5.0 billion in three years. The Asian Development Bank (ADB) pledged a loan of $800 million for the 2024-25 budget support during the tenure of the deposed government. This was done to help Bangladesh smoothly graduate from the least developed status and most likely it will stand by its commitment. The International Monetary Fund (IMF) approved its third tranche of its $4.7 billion loan programme in June last but not before it made the availability of the third and fourth tranches conditional to compliance of 33 obligations. Now clearing the way for the fifth tranche may not be difficult.
All this shows that the country's plunge into a crisis of Sri Lanka's order is most unlikely. Money, greenback to be precise, is finding its way into the country to the relief of the interim government. But the appearance of the financial bonhomie may be deceptive. In this connection, Finance and Commerce Adviser Dr Salehuddin Ahmed's straightforward demand for making the WB's conditionalities implementable is worth noticing. Notably, by the end of a month after the interim government's inauguration, it has sought budget support of $1.0 billion from the WB.
The streams of loan packages already made available and committed are sure to please quarters well beyond the team now at the helm of state affairs. Some of the foreign credits are most likely to be used after this government leaves office. Bangladesh's external debt has crossed $100 billion mark lately. Per capita foreign debt by March this year was Tk150,000--- a rise of Tk50,000 within three years, according to a local news agency. It should shoot up further now. The fresh doses of foreign debt burden are likely to enmesh the country in an intractable wider net not just of credit but also of commercial and political makeup.
Bangladesh's importance as a theatre of clashes of big powers' interests in South Asia cannot be overemphasised. Its importance has further enhanced with the prospect of exploiting the blue economy in the Bay of Bengal. So the powers are vying for taking it under their geo-political spheres of influence. Gone are the days of blatant way of doing so by instigating or staging military coups. This has been replaced by the behemoths of multinational companies that channelize capitals from around the least developed markets for accumulation. The recipe of tailor-made democracy hardly serves the recipient country and least of all its people.
The hidden agenda of accumulation of capital often miss the debate over democracy in the Third World. But the facts are cruel. Globalisation has reshaped patterns of production, consumption and commerce on a global scale. Of the largest 100 economies in the world, 51 were corporations and 49 countries before 2000, according to Sarah Anderson and John Cavanagh of the Institute of Policy Studies, a US think tank. The combined sales of 200 corporations were bigger than the combined economies of all countries minus the top 10. With rising clouts of the MNC goliaths, their share is likely to be greater by this time. There are complaints that big powers implements their political ambition through these corporations that control natural resources in African, Asian and Latin American countries by way of investments in development and industrialisation or activities like extraction of oil or gas and mining. Agreements are made overwhelmingly favouring the MNCs courtesy of greedy and unpatriotic elements ready to advance personal gains. Multilateral lending agencies are not unwilling to promote their agenda.
It is exactly at this point the core issue of the anti-discrimination movement encounter a formidable challenge not only from the corrupt and derelict political parties at home but also from the MNCs which are not ready to let go their grip on their business interests. The fracas over Scimitar's gas and oil exploration in Jalalabad, Sylhet can be cited as an example of how things can fall foul on casual approach to defending national resources. Committees formed recently to evaluate various agreements on projects may dig out scams involving advancement of personal or coterie gains at the cost of national interests.
A views exchange meeting on "Toward a Non-Discriminatory Bangladesh: Youth Manifesto" voiced on Tuesday last the concern about perpetuation of the culture of exploitation not sparing even the university dormitories. New generation youth leadership resents this and has rightly demanded young leaders' inclusion in business and politics. But the odds are stacked against them. They will have to stay alert and confront the combined power of outdated but entrenched political forces and the multinational corporate biggies along with their local subservient partners in business and bureaucracy. But the unalloyed sincerity of their purpose and commitment to a sacred cause of fighting for well-being of the nation is their most potent weapon. The generation Z (Gen Z) should beat off the commercial collusion of MNCs much as those may be more powerful than their governments.
Saif
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Destination countries no less responsible for returning stolen assets: TIB
However, it is also no less a responsibility of countries or territories where the laundered money from Bangladesh have been invested and thereby helped the host economies, the statement added. It also said the richer and so-called developed countries are the main destinations and beneficiaries...
en.prothomalo.com
Destination countries no less responsible for returning stolen assets: TIB
Staff Correspondent
Dhaka
Updated: 19 Sep 2024, 19: 25
Transparency International Bangladesh in a statement on Thursday said the burden of responsibility to prevent, control and bring back laundered money lies mainly on Bangladesh’s shoulders.
However, it is also no less a responsibility of countries or territories where the laundered money from Bangladesh has been invested and thereby benefitted the host economies, the statement added.
It also said the richer and so-called developed countries are the main destinations and beneficiaries of the lion's share of Bangladesh’s laundered money.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers
In view of the continued national and international media disclosures of accumulation of wealth in such countries by high profile publicly exposed Bangladeshis of the fallen regime, TIB has reiterated its call upon governments of the destination countries to take concrete action to help Bangladesh expedite the return of stolen assets as part of their international commitments and responsibility.
TIB executive director Iftekharuzzaman said, “Conventional hosts of money laundering like UK, USA and proverbial Switzerland have been joined in the recent couple of decades by Canada, Australia, Singapore, Hong Hong, Malaysia, Middle East countries like UAE, especially Dubai and even many offshore island territories as attractive hosts of Bangladeshi laundered money."
"In each destination of illicit transfers, there are powerful syndicates of highly skilled law firms, trust companies, offshore specialists, real estate agents, accountants, regulatory experts, and banking and financial services companies that facilitate the secret deals," he pointed out.
Iftekharuzzaman said, "These syndicates have systematically strengthened the demand side over the years, and by providing safe and lucrative incentives to our money launderers, contributed to flows of investments in host economies in multiple sectors, especially real estate, banking and luxury consumption.”
In some cases, he also said these are outcomes of relevant government policies or policy loopholes, whether deliberate or not. Many such countries have been persistently keeping provisions to invest laundered money by various means like trusts, real estate, investment passports, etc.
If not by policy provisions or loopholes in policies, enforcement deficiencies have helped creation of heavens for the money laundering facilitators who have been systematically incentivizing money launderers of Bangladesh, Iftekharuzzaman added.
TIB executive director calls upon governments of the host countries of Bangladesh’s laundered money like UK, USA, Canada, Dubai and Singapore to proactively identify and freeze any illegal assets owned by Bangladeshi nationals or entities in their respective jurisdictions.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers, he said.
Iftekharuzzaman also calls for cooperating with the government of Bangladesh to start and expedite the process of repatriation of the stolen assets and hold the money launderers to account through the available international processes including mutual legal assistance and technical support.
He laid emphasis on contributing to building the necessary professional and international capacity of relevant Bangladeshi state agencies, especially ACC, BFIU, CID, NBR and attorney general’s office to collaborate and coordinate with other above-mentioned host countries of Bangladesh’s laundered money to take similar actions.
Staff Correspondent
Dhaka
Updated: 19 Sep 2024, 19: 25
Transparency International Bangladesh in a statement on Thursday said the burden of responsibility to prevent, control and bring back laundered money lies mainly on Bangladesh’s shoulders.
However, it is also no less a responsibility of countries or territories where the laundered money from Bangladesh has been invested and thereby benefitted the host economies, the statement added.
It also said the richer and so-called developed countries are the main destinations and beneficiaries of the lion's share of Bangladesh’s laundered money.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers
In view of the continued national and international media disclosures of accumulation of wealth in such countries by high profile publicly exposed Bangladeshis of the fallen regime, TIB has reiterated its call upon governments of the destination countries to take concrete action to help Bangladesh expedite the return of stolen assets as part of their international commitments and responsibility.
TIB executive director Iftekharuzzaman said, “Conventional hosts of money laundering like UK, USA and proverbial Switzerland have been joined in the recent couple of decades by Canada, Australia, Singapore, Hong Hong, Malaysia, Middle East countries like UAE, especially Dubai and even many offshore island territories as attractive hosts of Bangladeshi laundered money."
"In each destination of illicit transfers, there are powerful syndicates of highly skilled law firms, trust companies, offshore specialists, real estate agents, accountants, regulatory experts, and banking and financial services companies that facilitate the secret deals," he pointed out.
Iftekharuzzaman said, "These syndicates have systematically strengthened the demand side over the years, and by providing safe and lucrative incentives to our money launderers, contributed to flows of investments in host economies in multiple sectors, especially real estate, banking and luxury consumption.”
In some cases, he also said these are outcomes of relevant government policies or policy loopholes, whether deliberate or not. Many such countries have been persistently keeping provisions to invest laundered money by various means like trusts, real estate, investment passports, etc.
If not by policy provisions or loopholes in policies, enforcement deficiencies have helped creation of heavens for the money laundering facilitators who have been systematically incentivizing money launderers of Bangladesh, Iftekharuzzaman added.
TIB executive director calls upon governments of the host countries of Bangladesh’s laundered money like UK, USA, Canada, Dubai and Singapore to proactively identify and freeze any illegal assets owned by Bangladeshi nationals or entities in their respective jurisdictions.
Take immediate actions to dismantle and hold to account syndicates facilitators of accumulation of money and wealth through illicit transfers, he said.
Iftekharuzzaman also calls for cooperating with the government of Bangladesh to start and expedite the process of repatriation of the stolen assets and hold the money launderers to account through the available international processes including mutual legal assistance and technical support.
He laid emphasis on contributing to building the necessary professional and international capacity of relevant Bangladeshi state agencies, especially ACC, BFIU, CID, NBR and attorney general’s office to collaborate and coordinate with other above-mentioned host countries of Bangladesh’s laundered money to take similar actions.
Saif
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Non-banks’ default loans hit record high
Non-bank financial institutions (NBFIs) in the past fiscal year saw their defaulted loans reach a record 33.15 percent of all disbursed loans, according to the central bank, indicating a fragile situation in the sector thanks to widespread loan irregularities and scams.
Non-banks’ default loans hit record high
Non-bank financial institutions (NBFIs) in the past fiscal year saw their defaulted loans reach a record 33.15 percent of all disbursed loans, according to the central bank, indicating a fragile situation in the sector thanks to widespread loan irregularities and scams.
At the end of June 2024, soured loans at the 35 NBFIs in the country totalled a record of Tk 24,711.28 crore against their total disbursed loans of Tk 74,533.74 crore, according to the latest data from the Bangladesh Bank (BB).
In the past one year till June, bad loans at the finance companies increased by Tk 4,760.11 crore, or 24 percent.
As of June last year, default loans in the sector stood at Tk 19,951.17 crore, central bank data show.
Up until March 2024, bad loans at NBFIs amounted to Tk 23,889 crore.
However, a senior BB official said that the actual amount of bad loans in the sector is much higher than what is reported to the central bank.
The official, requesting anonymity, said some NBFIs' defaulted loans tend to increase after central bank inspections.
According to BB data, of the total Tk 24,711.28 crore NBFI bad loans, Tk 21,033.33 crore has been classified as "bad and loss" -- which means a low chance of recovery.
The figures come at a time when development partners and economists have expressed concerns about vulnerabilities in Bangladesh's financial sector due to rising distressed assets, including non-performing loans, and a lack of corporate governance.
There are two main reasons behind the growing trend of non-performing loans, according to Kanti Kumar Saha, chief executive officer of Alliance Finance.
He said that these toxic assets are "legacy loans" from the large scams and irregularities that dealt a severe blow to the sector a few years ago.
For example, he said PK Halder, former managing director of NRB Global Bank (later renamed Global Islami Bank), swindled at least Tk 3,500 crore from four NBFIs: People's Leasing, International Leasing, FAS Finance and Bangladesh Industrial Finance Company Limited (BIFC), according to BB probe.
As a result, these four NBFIs have become ailing institutions with over 90 percent of their loans going bad, Saha commented.
On the other hand, the July- August student protests caused business closures and financial difficulties for small and medium enterprises, making loan repayments difficult for them, Saha said.
He added that even some large corporations are facing similar problems.
"Not only the NBFIs, but the overall economy is currently facing multiple challenges, which have contributed to the rise in bad loans within the sector," said Md Golam Sarwar Bhuiyan, chairman of the Bangladesh Leasing and Finance Companies Association.
Industry insiders said that the central bank was largely responsible for the ailing NBFIs.
They said that the central bank's supervision of NBFIs was not up to the mark, as reflected by frequent reports of scams and loan irregularities in the sector over the last few years.
SMART formula scrapped for NBFIs
The Bangladesh Bank yesterday scrapped the SMART (Six month Moving Average Rate of Treasury Bill) formula for the non-bank financial institutions sector (NBFIs) in order to make interest rates in the NBFI sector fully market-based.
This move follows the removal of the SMART formula from the banking system in May of this year.
Now the interest rate will be fixed based on the demand and supply of loanable funds in the NBFIs sector.
The central bank, however, imposed some conditions, such as the finance companies will have to publish the interest rates of deposits and loans on their website; the interest rates can vary at 1 percent based on the clients; NBFIs cannot able to impose interest rate out of the market rate; and they have to mention the fixed rate or floating rate in the loans approval paper.
NBFIs will not be able to change the interest rate within the six months of approval, but after the six months they can re-fix the interest rate every six-month based on the market rate.
The SMART formula was introduced on June 20 last year.
Non-bank financial institutions (NBFIs) in the past fiscal year saw their defaulted loans reach a record 33.15 percent of all disbursed loans, according to the central bank, indicating a fragile situation in the sector thanks to widespread loan irregularities and scams.
At the end of June 2024, soured loans at the 35 NBFIs in the country totalled a record of Tk 24,711.28 crore against their total disbursed loans of Tk 74,533.74 crore, according to the latest data from the Bangladesh Bank (BB).
In the past one year till June, bad loans at the finance companies increased by Tk 4,760.11 crore, or 24 percent.
As of June last year, default loans in the sector stood at Tk 19,951.17 crore, central bank data show.
Up until March 2024, bad loans at NBFIs amounted to Tk 23,889 crore.
However, a senior BB official said that the actual amount of bad loans in the sector is much higher than what is reported to the central bank.
The official, requesting anonymity, said some NBFIs' defaulted loans tend to increase after central bank inspections.
According to BB data, of the total Tk 24,711.28 crore NBFI bad loans, Tk 21,033.33 crore has been classified as "bad and loss" -- which means a low chance of recovery.
The figures come at a time when development partners and economists have expressed concerns about vulnerabilities in Bangladesh's financial sector due to rising distressed assets, including non-performing loans, and a lack of corporate governance.
There are two main reasons behind the growing trend of non-performing loans, according to Kanti Kumar Saha, chief executive officer of Alliance Finance.
He said that these toxic assets are "legacy loans" from the large scams and irregularities that dealt a severe blow to the sector a few years ago.
For example, he said PK Halder, former managing director of NRB Global Bank (later renamed Global Islami Bank), swindled at least Tk 3,500 crore from four NBFIs: People's Leasing, International Leasing, FAS Finance and Bangladesh Industrial Finance Company Limited (BIFC), according to BB probe.
As a result, these four NBFIs have become ailing institutions with over 90 percent of their loans going bad, Saha commented.
On the other hand, the July- August student protests caused business closures and financial difficulties for small and medium enterprises, making loan repayments difficult for them, Saha said.
He added that even some large corporations are facing similar problems.
"Not only the NBFIs, but the overall economy is currently facing multiple challenges, which have contributed to the rise in bad loans within the sector," said Md Golam Sarwar Bhuiyan, chairman of the Bangladesh Leasing and Finance Companies Association.
Industry insiders said that the central bank was largely responsible for the ailing NBFIs.
They said that the central bank's supervision of NBFIs was not up to the mark, as reflected by frequent reports of scams and loan irregularities in the sector over the last few years.
SMART formula scrapped for NBFIs
The Bangladesh Bank yesterday scrapped the SMART (Six month Moving Average Rate of Treasury Bill) formula for the non-bank financial institutions sector (NBFIs) in order to make interest rates in the NBFI sector fully market-based.
This move follows the removal of the SMART formula from the banking system in May of this year.
Now the interest rate will be fixed based on the demand and supply of loanable funds in the NBFIs sector.
The central bank, however, imposed some conditions, such as the finance companies will have to publish the interest rates of deposits and loans on their website; the interest rates can vary at 1 percent based on the clients; NBFIs cannot able to impose interest rate out of the market rate; and they have to mention the fixed rate or floating rate in the loans approval paper.
NBFIs will not be able to change the interest rate within the six months of approval, but after the six months they can re-fix the interest rate every six-month based on the market rate.
The SMART formula was introduced on June 20 last year.
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Tracing, recovering stolen wealth
IN RECENT years, the alarming trend of corrupt politicians and businessmen funnelling illicit funds into the United Kingdom, particularly London, has raised serious concerns for...
www.newagebd.net
Tracing, recovering stolen wealth
by Kollol Kibria 08 October, 2024, 00:00
IN RECENT years, the alarming trend of corrupt politicians and businessmen funnelling illicit funds into the United Kingdom, particularly London, has raised serious concerns for nations like Bangladesh. As billions of illicit dollars are parked in British real estate, businesses, and other financial assets, the challenge for countries suffering from corruption is twofold: understanding how the UK became a safe haven for this wealth and determining how to legally recover these assets. Despite having one of the most robust legal systems, the UK, especially London, has developed a reputation as a safe haven for illicit capital. The allure of London lies not only in its financial prominence but also in legal loopholes that make it difficult for foreign nations to recover illicitly acquired assets. For countries like Bangladesh, this poses both a challenge and an opportunity for new pathways for asset recovery.
London’s financial allure: a colonial legacy
LONDON’S evolution into a global financial hub has deep historical roots. During the colonial era, the British Empire became the world’s largest and most powerful economic force. London was the financial heart of this empire, and its institutions developed vast expertise in managing and transferring wealth across borders. As the empire collapsed in the mid-20th century, the UK sought new ways to sustain its economic prowess, ultimately transforming itself into a global financial hub.
The post-World War II era, particularly in the 1950s and 1960s, marked a turning point when the UK loosened capital restrictions to attract foreign investment. This liberalised economic environment enticed international elites from politically unstable or corrupt regimes, leading to the rapid accumulation of foreign wealth in British banks and real estate markets.
By the 1980s, London became a magnet for money from corrupt politicians and oligarchs, primarily due to the city’s lenient regulatory environment. This trend accelerated in the 1990s and 2000s, particularly with the collapse of the Soviet Union, as Russian oligarchs sought a safe haven for their wealth in the West.
The ‘London Laundromat’
LONDON’S real estate market has become one of the most visible manifestations of illicit capital. In affluent neighbourhoods such as Kensington, Chelsea, and Mayfair, foreign elites, many of whom are suspected of laundering money, have snapped up luxury properties. A 2022 Transparency International report revealed that over £1.5 billion worth of UK property is owned by Russian oligarchs or individuals linked to corruption. The majority of these properties are purchased through anonymous offshore companies, making it exceedingly difficult to trace the true owners.
The term ‘London Laundromat’ captures the city’s reputation as a laundering hub, where dirty money is cleansed through property investments, complex corporate structures and financial instruments. These shell companies, often registered in the UK’s overseas territories, such as the British Virgin Islands, serve to obscure ownership, allowing corrupt individuals to hide their wealth with minimal scrutiny.
Why corrupt individuals choose the UK
THE UK’s strong property rights and asset protection laws make it an ideal location for corrupt officials and businessmen seeking to safeguard their illicit gains. Once assets are purchased, it becomes difficult for foreign governments to seize them without navigating the UK’s complex legal system. In some cases, legal proceedings can drag on for years, providing ample time for individuals to protect their wealth.
The UK’s relationship with its overseas territories has also contributed to its status as a haven for illicit wealth. Territories such as the Cayman Islands and the British Virgin Islands are notorious for offering tax benefits and corporate anonymity. Many corrupt individuals channel their funds through these jurisdictions, using shell companies to distance themselves from their assets. While recent reforms have introduced beneficial ownership registers, these remain incomplete and often inaccessible to the public, further complicating efforts to trace and recover illicit wealth.
Legal obstacles: extradition and asset confiscation
THE UK’s strict legal protocols for extradition and asset confiscation are an added barrier for countries like Bangladesh seeking to recover stolen assets. For example, if a foreign government seeks to extradite a corrupt individual residing in the UK, they must provide substantial evidence and adhere to the stringent requirements of the UK legal system. The process is often long and complicated, allowing the individual to mount a robust legal defence and delay or even prevent extradition. In some instances, the UK courts have refused extradition requests, citing concerns about human rights violations in the requesting country. This legal framework, while offering protection to legitimate asylum seekers, also provides cover for corrupt individuals who can argue that their prosecution is politically motivated.
How Bangladesh can recover illicit assets
WHILE the legal environment in the UK presents challenges, Bangladesh has options to pursue the recovery of assets stolen by corrupt politicians and businessmen. The following legal avenues offer promising paths forward:
Utilising international conventions and mutual legal assistance treaties
Bangladesh is a signatory to the United Nations Convention against Corruption, which obliges countries to cooperate in the return of stolen assets. Under the convention, Bangladesh can work with the UK to identify and repatriate assets illicitly transferred by corrupt individuals. The UN convention provides a framework for the return of assets and encourages international cooperation in asset recovery cases, particularly when corruption affects developing countries. Mutual Legal Assistance Treaties between countries allow for cooperation in the investigation and prosecution of cross-border crimes, including money laundering and asset recovery. Bangladesh has signed several mutual legal assistance treaties, including with the UK, which can be leveraged to request assistance in tracing and confiscating illicit funds. Using these treaties, Bangladeshi authorities can request documents, banking records and other evidence necessary to prove that specific assets were acquired through corruption.
Engaging civil asset recovery proceedings and asset freezing and confiscation
In addition to criminal proceedings, Bangladesh can pursue civil asset recovery in the UK courts. Civil asset recovery allows the Bangladesh government to initiate lawsuits in UK courts to reclaim assets that were illicitly acquired and transferred abroad. Although this route is expensive and time-consuming, it can be an effective strategy when criminal prosecution is not feasible due to a lack of extradition treaties or other legal barriers. Working with UK authorities, Bangladesh can request that suspected assets be frozen until further investigation. This process, while slow, can prevent the movement or liquidation of funds.
Target offshore jurisdictions
A significant portion of illicit wealth from Bangladesh is funnelled through offshore jurisdictions such as the British Virgin Islands. To trace and recover these assets, Bangladesh can collaborate with international organisations and countries that specialise in targeting hidden offshore funds. Leveraging initiatives like the Financial Action Task Force, which provides guidelines and support for tackling money laundering, Bangladesh can gain critical assistance in recovering stolen assets from overseas territories. Additionally, Bangladesh can petition the UK government to issue Unexplained Wealth Orders against individuals suspected of holding illicit wealth in the UK, compelling them to explain the source of their assets. This legal tool could be instrumental in curbing financial crimes and recovering stolen wealth hidden abroad.
Increasing domestic anti-corruption measures
While pursuing international legal remedies, Bangladesh must also strengthen its domestic anti-corruption measures. By improving transparency, reforming financial regulations, and increasing the capacity of anti-corruption institutions, Bangladesh can create a more robust legal framework to prevent the illicit outflow of funds in the first place. Collaboration with international financial watchdogs can enhance these efforts.
Challenges in asset recovery
Recovering stolen assets remains a complex and costly endeavour, despite the legal avenues available. The UK’s legal system is structured to provide extensive protections for property owners, making it particularly challenging for foreign governments to reclaim assets. Corrupt individuals often exploit offshore structures and shell companies to distance themselves from their illicit wealth, creating layers of anonymity that are difficult to penetrate. Additionally, legal battles in UK courts can be protracted, with wealthy elites frequently employing top-tier legal representation to contest asset recovery efforts. Consequently, Bangladesh must adopt a coordinated strategy that combines legal expertise, international cooperation and diplomatic pressure. The UK’s historical role as a global financial hub, along with its robust legal protections and tax haven territories, has made it a sanctuary for corrupt politicians and businessmen seeking to launder and protect their illicit wealth. For Bangladesh, reclaiming these assets necessitates a multifaceted legal approach that involves international cooperation and comprehensive domestic reforms. By leveraging Mutual Legal Assistance Treaties, the United Nations Convention Against Corruption, civil asset recovery strategies, and targeting offshore jurisdictions, Bangladesh can work to recover stolen assets and hold corrupt individuals accountable.
As the global crackdown on corruption gains momentum, Bangladesh has a vital opportunity to reclaim its stolen wealth. Strengthening legal frameworks, utilising international agreements, and collaborating with UK authorities will enable Bangladesh to pursue and potentially recover illicit assets laundered abroad. However, this endeavour demands sustained effort, significant resources, and strategic diplomacy. Although the global financial system is intricate and opaque, it is not invincible. With the right tools and persistence, Bangladesh can effectively challenge the flow of dirty money and ensure accountability for those responsible for corruption, regardless of where they attempt to hide.
Kollol Kibria is an advocate at the Dhaka Judge Court and a political and human rights activist.
by Kollol Kibria 08 October, 2024, 00:00
IN RECENT years, the alarming trend of corrupt politicians and businessmen funnelling illicit funds into the United Kingdom, particularly London, has raised serious concerns for nations like Bangladesh. As billions of illicit dollars are parked in British real estate, businesses, and other financial assets, the challenge for countries suffering from corruption is twofold: understanding how the UK became a safe haven for this wealth and determining how to legally recover these assets. Despite having one of the most robust legal systems, the UK, especially London, has developed a reputation as a safe haven for illicit capital. The allure of London lies not only in its financial prominence but also in legal loopholes that make it difficult for foreign nations to recover illicitly acquired assets. For countries like Bangladesh, this poses both a challenge and an opportunity for new pathways for asset recovery.
London’s financial allure: a colonial legacy
LONDON’S evolution into a global financial hub has deep historical roots. During the colonial era, the British Empire became the world’s largest and most powerful economic force. London was the financial heart of this empire, and its institutions developed vast expertise in managing and transferring wealth across borders. As the empire collapsed in the mid-20th century, the UK sought new ways to sustain its economic prowess, ultimately transforming itself into a global financial hub.
The post-World War II era, particularly in the 1950s and 1960s, marked a turning point when the UK loosened capital restrictions to attract foreign investment. This liberalised economic environment enticed international elites from politically unstable or corrupt regimes, leading to the rapid accumulation of foreign wealth in British banks and real estate markets.
By the 1980s, London became a magnet for money from corrupt politicians and oligarchs, primarily due to the city’s lenient regulatory environment. This trend accelerated in the 1990s and 2000s, particularly with the collapse of the Soviet Union, as Russian oligarchs sought a safe haven for their wealth in the West.
The ‘London Laundromat’
LONDON’S real estate market has become one of the most visible manifestations of illicit capital. In affluent neighbourhoods such as Kensington, Chelsea, and Mayfair, foreign elites, many of whom are suspected of laundering money, have snapped up luxury properties. A 2022 Transparency International report revealed that over £1.5 billion worth of UK property is owned by Russian oligarchs or individuals linked to corruption. The majority of these properties are purchased through anonymous offshore companies, making it exceedingly difficult to trace the true owners.
The term ‘London Laundromat’ captures the city’s reputation as a laundering hub, where dirty money is cleansed through property investments, complex corporate structures and financial instruments. These shell companies, often registered in the UK’s overseas territories, such as the British Virgin Islands, serve to obscure ownership, allowing corrupt individuals to hide their wealth with minimal scrutiny.
Why corrupt individuals choose the UK
THE UK’s strong property rights and asset protection laws make it an ideal location for corrupt officials and businessmen seeking to safeguard their illicit gains. Once assets are purchased, it becomes difficult for foreign governments to seize them without navigating the UK’s complex legal system. In some cases, legal proceedings can drag on for years, providing ample time for individuals to protect their wealth.
The UK’s relationship with its overseas territories has also contributed to its status as a haven for illicit wealth. Territories such as the Cayman Islands and the British Virgin Islands are notorious for offering tax benefits and corporate anonymity. Many corrupt individuals channel their funds through these jurisdictions, using shell companies to distance themselves from their assets. While recent reforms have introduced beneficial ownership registers, these remain incomplete and often inaccessible to the public, further complicating efforts to trace and recover illicit wealth.
Legal obstacles: extradition and asset confiscation
THE UK’s strict legal protocols for extradition and asset confiscation are an added barrier for countries like Bangladesh seeking to recover stolen assets. For example, if a foreign government seeks to extradite a corrupt individual residing in the UK, they must provide substantial evidence and adhere to the stringent requirements of the UK legal system. The process is often long and complicated, allowing the individual to mount a robust legal defence and delay or even prevent extradition. In some instances, the UK courts have refused extradition requests, citing concerns about human rights violations in the requesting country. This legal framework, while offering protection to legitimate asylum seekers, also provides cover for corrupt individuals who can argue that their prosecution is politically motivated.
How Bangladesh can recover illicit assets
WHILE the legal environment in the UK presents challenges, Bangladesh has options to pursue the recovery of assets stolen by corrupt politicians and businessmen. The following legal avenues offer promising paths forward:
Utilising international conventions and mutual legal assistance treaties
Bangladesh is a signatory to the United Nations Convention against Corruption, which obliges countries to cooperate in the return of stolen assets. Under the convention, Bangladesh can work with the UK to identify and repatriate assets illicitly transferred by corrupt individuals. The UN convention provides a framework for the return of assets and encourages international cooperation in asset recovery cases, particularly when corruption affects developing countries. Mutual Legal Assistance Treaties between countries allow for cooperation in the investigation and prosecution of cross-border crimes, including money laundering and asset recovery. Bangladesh has signed several mutual legal assistance treaties, including with the UK, which can be leveraged to request assistance in tracing and confiscating illicit funds. Using these treaties, Bangladeshi authorities can request documents, banking records and other evidence necessary to prove that specific assets were acquired through corruption.
Engaging civil asset recovery proceedings and asset freezing and confiscation
In addition to criminal proceedings, Bangladesh can pursue civil asset recovery in the UK courts. Civil asset recovery allows the Bangladesh government to initiate lawsuits in UK courts to reclaim assets that were illicitly acquired and transferred abroad. Although this route is expensive and time-consuming, it can be an effective strategy when criminal prosecution is not feasible due to a lack of extradition treaties or other legal barriers. Working with UK authorities, Bangladesh can request that suspected assets be frozen until further investigation. This process, while slow, can prevent the movement or liquidation of funds.
Target offshore jurisdictions
A significant portion of illicit wealth from Bangladesh is funnelled through offshore jurisdictions such as the British Virgin Islands. To trace and recover these assets, Bangladesh can collaborate with international organisations and countries that specialise in targeting hidden offshore funds. Leveraging initiatives like the Financial Action Task Force, which provides guidelines and support for tackling money laundering, Bangladesh can gain critical assistance in recovering stolen assets from overseas territories. Additionally, Bangladesh can petition the UK government to issue Unexplained Wealth Orders against individuals suspected of holding illicit wealth in the UK, compelling them to explain the source of their assets. This legal tool could be instrumental in curbing financial crimes and recovering stolen wealth hidden abroad.
Increasing domestic anti-corruption measures
While pursuing international legal remedies, Bangladesh must also strengthen its domestic anti-corruption measures. By improving transparency, reforming financial regulations, and increasing the capacity of anti-corruption institutions, Bangladesh can create a more robust legal framework to prevent the illicit outflow of funds in the first place. Collaboration with international financial watchdogs can enhance these efforts.
Challenges in asset recovery
Recovering stolen assets remains a complex and costly endeavour, despite the legal avenues available. The UK’s legal system is structured to provide extensive protections for property owners, making it particularly challenging for foreign governments to reclaim assets. Corrupt individuals often exploit offshore structures and shell companies to distance themselves from their illicit wealth, creating layers of anonymity that are difficult to penetrate. Additionally, legal battles in UK courts can be protracted, with wealthy elites frequently employing top-tier legal representation to contest asset recovery efforts. Consequently, Bangladesh must adopt a coordinated strategy that combines legal expertise, international cooperation and diplomatic pressure. The UK’s historical role as a global financial hub, along with its robust legal protections and tax haven territories, has made it a sanctuary for corrupt politicians and businessmen seeking to launder and protect their illicit wealth. For Bangladesh, reclaiming these assets necessitates a multifaceted legal approach that involves international cooperation and comprehensive domestic reforms. By leveraging Mutual Legal Assistance Treaties, the United Nations Convention Against Corruption, civil asset recovery strategies, and targeting offshore jurisdictions, Bangladesh can work to recover stolen assets and hold corrupt individuals accountable.
As the global crackdown on corruption gains momentum, Bangladesh has a vital opportunity to reclaim its stolen wealth. Strengthening legal frameworks, utilising international agreements, and collaborating with UK authorities will enable Bangladesh to pursue and potentially recover illicit assets laundered abroad. However, this endeavour demands sustained effort, significant resources, and strategic diplomacy. Although the global financial system is intricate and opaque, it is not invincible. With the right tools and persistence, Bangladesh can effectively challenge the flow of dirty money and ensure accountability for those responsible for corruption, regardless of where they attempt to hide.
Kollol Kibria is an advocate at the Dhaka Judge Court and a political and human rights activist.
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Extortions back in Bangladesh's transport sector
The extortions in the country’s transport sector have got almost back in full swing from the first week of September as police, transport company owners and political leaders allegedly started taking...
www.newagebd.net
Extortions back in Bangladesh's transport sector
Staff Correspondent 10 October, 2024, 01:10
File photo
The extortions in the country’s transport sector have got almost back in full swing from the first week of September as police, transport company owners and political leaders allegedly started taking tolls in Dhaka as elsewhere across the country.
After the fall of Awami League regime on August 5, although the Bangladesh Nationalist Party took control over Dhaka Road Transport Owners Association instead of AL on August 14 through forming a convening committee, police started taking tolls in the first week of September, according to industry insiders, including transport owners.
After the fall of AL regime, BNP youth wing Jatiyatabadi Juba Dal leaders and activists were reportedly collecting from owners and even those running businesses AC and Non-AC buses of Bangladesh Road Transport Corporation, they said.
BNP Senior Joint General Secretary Ruhur Kabir Rizvi said that they had received several allegations of the party leaders and activists and took action against them.
‘We are now in a strict position about extortion and grabbing. We will not spare any party members involved in such activities,’ Rizvy told New Age.
In Dhaka city, people started collecting tolls for allowing to plying each Leguna.
In Shiksan to Gabtoli route each Leguna has to pay Tk 400 as they had to pay Tk 1,500 during the authoritarian Sheikh Hasina regime, according to several Leguna drivers.
Bus owners said that companies were taking money from each Dhaka city service and long route buses from bus owners in the name of gate pass popularly known as GP.
They said that if the GPs were not taken, the fare of buses would come down significantly and did not have to depend much on fuel oil prices.
Dewan Paribahan managing director Kutubuddin Swapan acknowledged collecting money as GP but said that the money was spent for giving salary of bus driver and his assistant along with accidents or other hassles on roads.
‘We are taking Tk 250-300 as GP now. We spent most of the money for the welfare of owners and workers,’ Kutubuddin said while the company had 41 city service buses.
Md Emon Hossain, who has been working as a driver’s assistant for the past five years in Dewan Paribahan, said that they got the money after providing money to owner, expensing on oil and GP money.
‘The bus company did not give us money for working in the sector. We have to earn our money after running bus on road and the portion was taken from bus owner,’ said Emon.
Md Hannan Hossain, driver of Dewan Paribahan said that they had to give Tk 800 as GP per day during the AL government while Tk 200 for launching e-ticketing.
VIP Paribahan has 120 buses and the company takes Tk 500 as GP from each bus, amounting Tk 60,000 per day from every day.
Md Lal Mia, a driver’s assistant of VIP Paribahan, told New Age that they took salary from the bus owners not from the company.
Asked about the toll in the name of GP, VIP Paribahan managing director Abdur Razzak cut the phone calls and did not respond to phone calls after several attempts.
GPs are collecting most of the bus companies in the city like Bhuiyan Paribahan, Desh Shatabdi, Bkash, Raida Paribahan, Tanzil, Labbaik, Malancha and Rajanigandha.
Several transport owners told New Age seeking anonymity that police did not take money from August 5 to September but started taking money from the first week of September.
They said that the traffic policemen were filing cases on transports on wholesale basis after having all valid documents in the past few days.
The traffic police are leaving those buses paying toll amount to traffic inspectors.
DMP spokesperson Muhammad Talebur Rahman said that they were unaware about police personnel involved in taking toll from buses.
‘If we receive specific allegations, we will look into the matter,’ Talebur added.
During the AL regime every city service buses had to pay Tk 110 to the Dhaka Sarak Paribahan Malik Samity, bus owners said that they had to pay from Tk 50 to Tk 100 for each bus to the same samity.
Bus owners said that the running did not create pressure in the same way like the AL government’s fixed toll, which is a slight relief for them.
On 10 August, BNP Cumilla district unit joint convener Saiful Islam Bhuiyan broke open the offices of the transport owners and workers in the capital’s Eskaton.
On August 14, they formed a convening committee, Saiful Islam convener, MA Baten and Rafiqul Islam Kajol as joint conveners in a 31-member committee.
A total of 71 members committee was formed through an election on September 10 where MA Baten and Saiful Islam elected as president and secretary general respectively while Khondoker Rafiqul Islam Kajol as executive president, said the newly formed committee organising secretary Zahid AL Latif.
‘We are not announcing the names to media as we are waiting for the government’s gazette,’ Zahid added.
Asked about the extortion in the name of GP and the malik samity to the bus owners, Saiful Islam said, ‘We are not collecting tolls. If some people take toll using our name, we will find out and bring them to book.’
He acknowledged about the allegations of taking money from the bus owners in the name of GP by the bus companies.
‘I have found some allegations from owners about GP. We are investigating the matter,’ Saiful added.
According to Saiful, about 240 companies’ buses are plying on roads in Dhaka city while 70 of them did not have proper route permit.
‘We have started working on this as well,’ he added.
On September 23, two groups of the BNP clashed over control of Bandhan Paribahan buses operating on the Dhaka-Narayanganj route, leaving at least 10 people injured.
The clash occurred near the launch terminal area of Narayanganj around noon. Both sides reportedly used firearms, sticks, and other weapons during the confrontation.
Police also detained 12 people in this connection.
Narayanganj Sadar model police station officer-in-charge Nazrul Islam told New Age that both groups filed two cases over the incident.
‘We have produced eight persons to the court and they were now in jail after two days remands,’ the OC added.
Meanwhile, the tolls were also collected from truck, pick-ups and covered vans in the name of municipalities for long route journey in most districts.
BNP-Jamaat leaders have been controlling the transport sector in Sylhet since the fall of Sheikh Hasina’s government. Sylhet District Bus Owners Association member said that any change in the practice of extortion has not come even though the government has changed, New Age Staff Correspondent in Sylhet reported.
A member of the association told New Age on condition of anonymity that the SDBOA president Abul Kalam, also former vice-president of the district BNP, and Islami Chhatra Shibir’s ex-president Lokman Ahmed are now controlling the transport sector of Sylhet.
‘Kalam was elected president of the SDBOA about a years back after joining to Awami League from BNP. But, immediately after changeover of the state power, he again merged with the BNP,’ the association member said.
Another transport owner said that apart from other kinds of benefits, the complete control of Ena Transport Express is now in the hands of Kalam and Lokman.
Being contacted, Kalam told New Age that as an uncontrolled-like situation is being prevailed so far in the country, it is tough to know always that what is actually happening. He, however, claimed that the overall situation of Sylhet transport sector is better now.
He also strongly rejected the allegations brought against him of extortion and taking illegal benefit from the transport owners or drivers.
Talking to New Age, district transport workers union’s executive president Abdus Salam said that he heard that extortion is being collected from the vehicles, which are used to carry smuggled and illegal goods.
‘These kinds of incidents are happening through a new syndicate. However, I did not know who are involved with the new syndicate, he said.
Salam also alleged that a gang of hoodlums are illegally collecting toll from the goods loaded trucks while entering the Chhatak municipal area.
“We already have complained against this illegal extortion. We also are ready to take to the streets to protest, if the situation crosses the limit of tolerance,’ he claimed.
In Rajshahi, after the fall of former prime minister Sheikh Hasina, two factions of BNP leaders and activists clashed over taking over the office of Rajshahi Road Transport Group on August 09, New Age Staff Correspondent in Rajshahi reported.
Later, the duo factions submitted written complaint with the Rajshahi deputy commissioner, claiming them as the new executive of the Road Transport Group.
Following the incident, the Rajshahi district administration then issued show-cause notices to the duo factions, asking why an administrator from the district administration would not be appointed.
Nazrul Islam Helal, a former member of Rajshahi City BNP who claimed himself as the new general secretary of the group, told New Age that they had already responded the show-cause notice and hoped that he would be declared legal general secretary.
Meanwhile, bus owners and transport workers alleged that collecting money in the name of the road transport group and motor shramik union continued like the previous way.
Wishing anonymity, several transport workers claimed that nothing except shifting the power to another hand has changed after the fall of the autocratic government on August 05.
Staff Correspondent 10 October, 2024, 01:10
File photo
The extortions in the country’s transport sector have got almost back in full swing from the first week of September as police, transport company owners and political leaders allegedly started taking tolls in Dhaka as elsewhere across the country.
After the fall of Awami League regime on August 5, although the Bangladesh Nationalist Party took control over Dhaka Road Transport Owners Association instead of AL on August 14 through forming a convening committee, police started taking tolls in the first week of September, according to industry insiders, including transport owners.
After the fall of AL regime, BNP youth wing Jatiyatabadi Juba Dal leaders and activists were reportedly collecting from owners and even those running businesses AC and Non-AC buses of Bangladesh Road Transport Corporation, they said.
BNP Senior Joint General Secretary Ruhur Kabir Rizvi said that they had received several allegations of the party leaders and activists and took action against them.
‘We are now in a strict position about extortion and grabbing. We will not spare any party members involved in such activities,’ Rizvy told New Age.
In Dhaka city, people started collecting tolls for allowing to plying each Leguna.
In Shiksan to Gabtoli route each Leguna has to pay Tk 400 as they had to pay Tk 1,500 during the authoritarian Sheikh Hasina regime, according to several Leguna drivers.
Bus owners said that companies were taking money from each Dhaka city service and long route buses from bus owners in the name of gate pass popularly known as GP.
They said that if the GPs were not taken, the fare of buses would come down significantly and did not have to depend much on fuel oil prices.
Dewan Paribahan managing director Kutubuddin Swapan acknowledged collecting money as GP but said that the money was spent for giving salary of bus driver and his assistant along with accidents or other hassles on roads.
‘We are taking Tk 250-300 as GP now. We spent most of the money for the welfare of owners and workers,’ Kutubuddin said while the company had 41 city service buses.
Md Emon Hossain, who has been working as a driver’s assistant for the past five years in Dewan Paribahan, said that they got the money after providing money to owner, expensing on oil and GP money.
‘The bus company did not give us money for working in the sector. We have to earn our money after running bus on road and the portion was taken from bus owner,’ said Emon.
Md Hannan Hossain, driver of Dewan Paribahan said that they had to give Tk 800 as GP per day during the AL government while Tk 200 for launching e-ticketing.
VIP Paribahan has 120 buses and the company takes Tk 500 as GP from each bus, amounting Tk 60,000 per day from every day.
Md Lal Mia, a driver’s assistant of VIP Paribahan, told New Age that they took salary from the bus owners not from the company.
Asked about the toll in the name of GP, VIP Paribahan managing director Abdur Razzak cut the phone calls and did not respond to phone calls after several attempts.
GPs are collecting most of the bus companies in the city like Bhuiyan Paribahan, Desh Shatabdi, Bkash, Raida Paribahan, Tanzil, Labbaik, Malancha and Rajanigandha.
Several transport owners told New Age seeking anonymity that police did not take money from August 5 to September but started taking money from the first week of September.
They said that the traffic policemen were filing cases on transports on wholesale basis after having all valid documents in the past few days.
The traffic police are leaving those buses paying toll amount to traffic inspectors.
DMP spokesperson Muhammad Talebur Rahman said that they were unaware about police personnel involved in taking toll from buses.
‘If we receive specific allegations, we will look into the matter,’ Talebur added.
During the AL regime every city service buses had to pay Tk 110 to the Dhaka Sarak Paribahan Malik Samity, bus owners said that they had to pay from Tk 50 to Tk 100 for each bus to the same samity.
Bus owners said that the running did not create pressure in the same way like the AL government’s fixed toll, which is a slight relief for them.
On 10 August, BNP Cumilla district unit joint convener Saiful Islam Bhuiyan broke open the offices of the transport owners and workers in the capital’s Eskaton.
On August 14, they formed a convening committee, Saiful Islam convener, MA Baten and Rafiqul Islam Kajol as joint conveners in a 31-member committee.
A total of 71 members committee was formed through an election on September 10 where MA Baten and Saiful Islam elected as president and secretary general respectively while Khondoker Rafiqul Islam Kajol as executive president, said the newly formed committee organising secretary Zahid AL Latif.
‘We are not announcing the names to media as we are waiting for the government’s gazette,’ Zahid added.
Asked about the extortion in the name of GP and the malik samity to the bus owners, Saiful Islam said, ‘We are not collecting tolls. If some people take toll using our name, we will find out and bring them to book.’
He acknowledged about the allegations of taking money from the bus owners in the name of GP by the bus companies.
‘I have found some allegations from owners about GP. We are investigating the matter,’ Saiful added.
According to Saiful, about 240 companies’ buses are plying on roads in Dhaka city while 70 of them did not have proper route permit.
‘We have started working on this as well,’ he added.
On September 23, two groups of the BNP clashed over control of Bandhan Paribahan buses operating on the Dhaka-Narayanganj route, leaving at least 10 people injured.
The clash occurred near the launch terminal area of Narayanganj around noon. Both sides reportedly used firearms, sticks, and other weapons during the confrontation.
Police also detained 12 people in this connection.
Narayanganj Sadar model police station officer-in-charge Nazrul Islam told New Age that both groups filed two cases over the incident.
‘We have produced eight persons to the court and they were now in jail after two days remands,’ the OC added.
Meanwhile, the tolls were also collected from truck, pick-ups and covered vans in the name of municipalities for long route journey in most districts.
BNP-Jamaat leaders have been controlling the transport sector in Sylhet since the fall of Sheikh Hasina’s government. Sylhet District Bus Owners Association member said that any change in the practice of extortion has not come even though the government has changed, New Age Staff Correspondent in Sylhet reported.
A member of the association told New Age on condition of anonymity that the SDBOA president Abul Kalam, also former vice-president of the district BNP, and Islami Chhatra Shibir’s ex-president Lokman Ahmed are now controlling the transport sector of Sylhet.
‘Kalam was elected president of the SDBOA about a years back after joining to Awami League from BNP. But, immediately after changeover of the state power, he again merged with the BNP,’ the association member said.
Another transport owner said that apart from other kinds of benefits, the complete control of Ena Transport Express is now in the hands of Kalam and Lokman.
Being contacted, Kalam told New Age that as an uncontrolled-like situation is being prevailed so far in the country, it is tough to know always that what is actually happening. He, however, claimed that the overall situation of Sylhet transport sector is better now.
He also strongly rejected the allegations brought against him of extortion and taking illegal benefit from the transport owners or drivers.
Talking to New Age, district transport workers union’s executive president Abdus Salam said that he heard that extortion is being collected from the vehicles, which are used to carry smuggled and illegal goods.
‘These kinds of incidents are happening through a new syndicate. However, I did not know who are involved with the new syndicate, he said.
Salam also alleged that a gang of hoodlums are illegally collecting toll from the goods loaded trucks while entering the Chhatak municipal area.
“We already have complained against this illegal extortion. We also are ready to take to the streets to protest, if the situation crosses the limit of tolerance,’ he claimed.
In Rajshahi, after the fall of former prime minister Sheikh Hasina, two factions of BNP leaders and activists clashed over taking over the office of Rajshahi Road Transport Group on August 09, New Age Staff Correspondent in Rajshahi reported.
Later, the duo factions submitted written complaint with the Rajshahi deputy commissioner, claiming them as the new executive of the Road Transport Group.
Following the incident, the Rajshahi district administration then issued show-cause notices to the duo factions, asking why an administrator from the district administration would not be appointed.
Nazrul Islam Helal, a former member of Rajshahi City BNP who claimed himself as the new general secretary of the group, told New Age that they had already responded the show-cause notice and hoped that he would be declared legal general secretary.
Meanwhile, bus owners and transport workers alleged that collecting money in the name of the road transport group and motor shramik union continued like the previous way.
Wishing anonymity, several transport workers claimed that nothing except shifting the power to another hand has changed after the fall of the autocratic government on August 05.
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TIB estimates up to Tk 51,000 cr corruption in RHD projects
Tk 51,000 crore or estimated up to 40 per cent of the costs in the construction works carried out under the Roads and Highways Department development projects in the...
www.newagebd.net
TIB estimates up to Tk 51,000 cr corruption in RHD projects
Staff Correspondent 09 October, 2024, 15:27
Transparency International Bangladesh organises a research report unveiling programme at its office in Dhaka on Wednesday. | New Age photo
Tk 51,000 crore or estimated up to 40 per cent of the costs in the construction works carried out under the Roads and Highways Department development projects in the past 15 years was misused through corruption.
A Transparency International Bangladesh research report on Wednesday revealed the information.
‘In the roads and highways sector, development activities have been monopolised through tripartite collusion among politicians, high-ranking bureaucrats, and contractors, which has captured the policymaking process, procurement systems, and project implementation,’ read the report.
Blaming the three-party nexus for this massive embezzlement by violating laws, TIB executive director Iftekharuzzaman at a press conference, held at its office in the capital, said, ‘unless this nexus is busted, corruption will never be effectively controlled.’
In the context of the newly appointed interim government, he also said that overall some people were replaced by others in the new regime, but long-held institutional bad practices and mentality remained the same across sectors.
The TIB report shows that the estimated overall amount of corruption in the construction works of development projects implemented under the RHD from 2009–2010 to 2023–2024 fiscal years stood between Tk 29,230 crore and Tk 50,835 crore.
Percentage-wise, the report shows that the estimated corruption rate ranges from 23 per cent to 40 per cent of the total costs of the construction of roads and bridges in development projects implemented under the Annual Development Programme.
The corruption includes 11–14 per cent bribery in obtaining work orders and receiving bills by the contractors, 10–20 per cent corruption through collusion between politicians, contractors, and high-level officials, and 2–6 per cent corruption in areas, including renting tender licences, selling work orders, compromises and local political extortion.
Data for the research titled ‘Governance challenges in the implementation of Roads and Highways’ development projects’ was collected from June 2023 to September this year.
The development projects completed between 2017–18 and 2021–22 fiscals (initiated from 2010–11 to 2018–19) were included in the specific scope of this study.
Emphasis in the study was laid on the government-funded projects below Tk 1,000 crore, while mega projects funded by foreign donors were excluded due to differences in modalities of implementation, decision-making, and policy-making processes.
The overall observation on corruption in the research, however, was made on all the roads and highways department projects executed under both local and foreign funds in the past 15 years under the annual development programme, said TIB senior research fellow Md Julkarnayeen, who conducted the research with fellow research associate Md Mostafa Kamal.
In the past five years, 38.8 per cent of the completed projects took 4–5 years to finish, and 13.7 per cent took more than five years with the project costs increased by as much as 93 per cent compared with the original budget estimation, the research found.
The research outcomes also showed that these projects often failed to follow the laws and guidelines, skipped proper planning and feasibility studies, and also lacked coordination among different authorities.
Without in-depth feasibility assessments and environmental impact evaluations, including assessment for climate change impact and disaster risks, the projects lack sustainability.
While only 19 out of 25 completed projects under the scope of the research had evaluation reports prepared, only seven of these reports were published on the Implementation Monitoring and Evaluation Division website.
The RHD’s audit for the 2019–20 fiscal was completed in 2021, and the report was presented to the relevant parliamentary committee in the 2023–24 fiscal.
Over the past decade, 15 major contracting firms had established dominance by capturing the RHD tendering process through the internal settlement and collusion, the report said.
‘We thought that during this interim government period we would get information but we did not,’ Iftekharuzzaman alleged, adding that on Tuesday the RHD officials told them that they would give them the information.
He said that those involved in the three-party nexus should be brought under exemplary accountability in the changed scenario of the country.
To prevent personal gains, nepotism, irregularities and corruption in the implementation of roads and highways development projects, he also demanded a ‘conflict of interest law’ and its strict reflection in other relevant rules and regulations.
‘We believe that a scope has been created and the nation should take this opportunity,’ added the TIB chief.
The background of the research read that since the 2013–14 fiscal, the transport and communication sector had received the highest allocations in the annual development programme, while the total development expenditure for the RHD allocated from the ADP budget between 2009–2010 and 2023–2024 fiscals amounted to Tk 1,69,450 crore.
Staff Correspondent 09 October, 2024, 15:27
Transparency International Bangladesh organises a research report unveiling programme at its office in Dhaka on Wednesday. | New Age photo
Tk 51,000 crore or estimated up to 40 per cent of the costs in the construction works carried out under the Roads and Highways Department development projects in the past 15 years was misused through corruption.
A Transparency International Bangladesh research report on Wednesday revealed the information.
‘In the roads and highways sector, development activities have been monopolised through tripartite collusion among politicians, high-ranking bureaucrats, and contractors, which has captured the policymaking process, procurement systems, and project implementation,’ read the report.
Blaming the three-party nexus for this massive embezzlement by violating laws, TIB executive director Iftekharuzzaman at a press conference, held at its office in the capital, said, ‘unless this nexus is busted, corruption will never be effectively controlled.’
In the context of the newly appointed interim government, he also said that overall some people were replaced by others in the new regime, but long-held institutional bad practices and mentality remained the same across sectors.
The TIB report shows that the estimated overall amount of corruption in the construction works of development projects implemented under the RHD from 2009–2010 to 2023–2024 fiscal years stood between Tk 29,230 crore and Tk 50,835 crore.
Percentage-wise, the report shows that the estimated corruption rate ranges from 23 per cent to 40 per cent of the total costs of the construction of roads and bridges in development projects implemented under the Annual Development Programme.
The corruption includes 11–14 per cent bribery in obtaining work orders and receiving bills by the contractors, 10–20 per cent corruption through collusion between politicians, contractors, and high-level officials, and 2–6 per cent corruption in areas, including renting tender licences, selling work orders, compromises and local political extortion.
Data for the research titled ‘Governance challenges in the implementation of Roads and Highways’ development projects’ was collected from June 2023 to September this year.
The development projects completed between 2017–18 and 2021–22 fiscals (initiated from 2010–11 to 2018–19) were included in the specific scope of this study.
Emphasis in the study was laid on the government-funded projects below Tk 1,000 crore, while mega projects funded by foreign donors were excluded due to differences in modalities of implementation, decision-making, and policy-making processes.
The overall observation on corruption in the research, however, was made on all the roads and highways department projects executed under both local and foreign funds in the past 15 years under the annual development programme, said TIB senior research fellow Md Julkarnayeen, who conducted the research with fellow research associate Md Mostafa Kamal.
In the past five years, 38.8 per cent of the completed projects took 4–5 years to finish, and 13.7 per cent took more than five years with the project costs increased by as much as 93 per cent compared with the original budget estimation, the research found.
The research outcomes also showed that these projects often failed to follow the laws and guidelines, skipped proper planning and feasibility studies, and also lacked coordination among different authorities.
Without in-depth feasibility assessments and environmental impact evaluations, including assessment for climate change impact and disaster risks, the projects lack sustainability.
While only 19 out of 25 completed projects under the scope of the research had evaluation reports prepared, only seven of these reports were published on the Implementation Monitoring and Evaluation Division website.
The RHD’s audit for the 2019–20 fiscal was completed in 2021, and the report was presented to the relevant parliamentary committee in the 2023–24 fiscal.
Over the past decade, 15 major contracting firms had established dominance by capturing the RHD tendering process through the internal settlement and collusion, the report said.
‘We thought that during this interim government period we would get information but we did not,’ Iftekharuzzaman alleged, adding that on Tuesday the RHD officials told them that they would give them the information.
He said that those involved in the three-party nexus should be brought under exemplary accountability in the changed scenario of the country.
To prevent personal gains, nepotism, irregularities and corruption in the implementation of roads and highways development projects, he also demanded a ‘conflict of interest law’ and its strict reflection in other relevant rules and regulations.
‘We believe that a scope has been created and the nation should take this opportunity,’ added the TIB chief.
The background of the research read that since the 2013–14 fiscal, the transport and communication sector had received the highest allocations in the annual development programme, while the total development expenditure for the RHD allocated from the ADP budget between 2009–2010 and 2023–2024 fiscals amounted to Tk 1,69,450 crore.
