FY23 under BFIU lens: Dubious banking up by 65pc
Staff Reporter :
Suspicious transaction reports (STR) and suspicious activity reports (SAR) in Bangladesh saw a significant uptick, increasing by 65 percent year-on-year to 14,106, comprising 9,769 STRs and 4,337 SARs in the outgoing financial year of 2022-23, as per the annual report of the Bangladesh Financial Intelligence Unit (BFIU).
The anti-money laundering agency attributed the surge in suspicious transactions in FY23 to heightened fraudulent activities in online-based platforms such as online gambling/betting, crypto trading, and digital hundi.
According to the BFIU annual report, 12,809 of the suspicious activities in FY23 were recorded in banks, accounting for 90.80 percent of all reports, while 900 were recorded in money transmitters and 121 in Non-Bank Financial Institutions (NBFIs).
These findings were disclosed during the release of the FY23 annual reports at a press conference held at the Bangladesh Bank head office in the capital.
BFIU head Md Masud Biswas chaired the event, with additional Director Kamal Hossain delivering the keynote address.
Comparatively, in FY22, the BFIU received 8,571 STR and SAR reports from reporting agencies, while in FY 2020-21, the total number stood at 5,280.
Similarly, suspicious transaction activity reports in banks were 3,675 and 3,573 in FY20 and FY19, respectively, as per BFIU data.
Kamal Hossain, additional director of BFIU, emphasized, “The increase in STRs and SARs does not necessarily indicate a rise in money laundering activities. It is due to the increase in digital financial transactions and enhanced monitoring by our department.”
During the press briefing, BFIU chief Masud Biswas highlighted the challenges associated with retrieving laundered money, stating, “Once money is laundered, it is difficult to recover since many parties have to be informed.”
The intelligence unit received 1,075 information requests from various agencies in FY23 alone.
Among these, the Anti-Corruption Commission (ACC) made the most requests with 540, followed by the Criminal Investigation Department (CID) with 64, and the National Board of Revenue (NBR) with 95.
However, in FY23, 520 suspicious transactions related to bank loans were detected, marking a 52 percent increase from the previous fiscal year.
Among reports filed by scheduled banks, sending remittances accounted for 6.38 percent of the reporting.
BFIU data showed a 96.97 percent increase in reports by money remitters, highlighting the persistent risk. Under the Money Laundering Prevention Act 2012, BFIU can obtain cash transaction reports (CTR) from banks and non-bank financial institutions (NBFIs) and subsequently analyze the information.
In FY23, banks submitted a total of 38.68 million cash transactions worth Tk2,285,916 crore, whereas NBFIs submitted 1,238 cash transactions worth Tk210 crore, the report said. Information from CTR is utilized for operational analysis, strategic assessment, and risk-based supervision of banks and NBFIs.
Moreover, the BFIU report indicated that in FY23, overall cash transactions through digital payment methods amounted to Tk22.86 lakh crore, marking an 8 percent increase from the previous fiscal year, with the number of transactions rising by nearly 5 percent year-on-year to reach 3.8 crore.
The report further elucidated the factors driving up cash transactions, citing traditional criminal activities such as corruption, fraud, forgery, drug dealing, extortion, sexual exploitation, hundi, and human trafficking as significant sources of cash proceeds.
The Bangladesh Financial Intelligence Unit (BFIU) serves as the central agency for Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering Proliferation Financing (CPF) in Bangladesh.
In addition to its intelligence development function, it acts as a regulatory and supervisory body for preventing money laundering (ML), terrorist financing (TF), and proliferation financing (PF) risks.
