Friday, July 10, 2015
Silence over unabated money-laundering, siphoning of tax-dodged money decried
Social justice activists jointly decried Bangladesh’s silence over unabated money-laundering, siphoning of tax dodged money, which severely dented social development investment.
There is a demand of the government to punish those Bangladesh nationals who allegedly laundered money and are also involved in tax dodging.
The leader of the alliance Reazul Karim Chowdhury of EquityBD said that tax evasion is predominant among the nationals who have opted for second-home in Malaysia, Dubai, Canada, United States and other destinations.
Under this situation, Chowdhury suggested formation of UN Tax Management Authority or Commission to intervene in money laundering and tax evasion by multi-national companies (MNCs).
The activists deliberately did not mention the nationals who are engaged in money laundering and tax evasion, but have indicated that business entrepreneurs, politicians and even senior bureaucrats either have a second-home or are contemplating to have a second-home soon.
Among the business community, the majority are the importers, who make windfall profits, are unaccounted, and untaxed.
On the other hand, the number of exporter’s choice for second-home is far less than the importers. The exporters, mostly garments and textile exporters apply for immigration to Australia, New Zealand, Canada and United States, which could be deemed as second-home.
The flight of the capital and siphoning of national wealth are only possible when there is lack of vigilance of monitoring of the income of the tax evaders, the social activist remarked.
Tax evasion obviously encourages spatial corruption of bureaucrats and politicians, which is unfortunately never detected and unable to bring them under the tax regime.
The rights groups lauded the Bangladesh Bank’s stringent vigil against money-laundering, but said that the central bank needs to do more to detect flight of capital through informal money-laundering agents, the money-changers.
The NGOs urged the central bank to bring the money-changers, engaged in ‘hundi’ under the scanner to check siphoning of capitals.
They blamed the MNCs for dodging huge taxes on various activities, which has become difficult of the state machineries to realise from the foreign companies.
Saleem Samad, an Ashoka Fellow (USA) is an award winning investigative reporter and is Diplomatic Correspondent with Daily Observer, Bangladesh. Twitter
Sunday, March 22, 2015
Photo: A Bangladeshi policeman (L) looks on as government party activists (R) wield sticks against activists of the Bangladesh National Party in Dhaka on Jan. 5.(HASAN RAJA/AFP/Getty Images)
Widespread violence and strikes across Bangladesh will soon enter their third month, extending a stranglehold on the economy that has cost the country billions. The world's second largest ready-made garments exporter, Bangladesh began the year courting investment to diversify its primarily textile-oriented manufacturing base to include low-end electronics and automobile assembly. But opposition political forces led by the Bangladesh Nationalist Party began an extended campaign of social unrest following the anniversary of last year's disputed Jan. 5 elections. The military, which has been the historical mediator of Bangladesh's deep political divisions, has repeatedly denied calls from the opposition to intervene and preside over fresh elections. The country faces an extended battle of attrition between the Bangladesh Nationalist Party and the Awami League government. The unrest challenges the growth the national economy and textile industry have experienced in recent years.
Bangladesh is a poor, developing nation situated at the north of the Bay of Bengal. It is almost entirely surrounded by India and shares a short border with Myanmar. The country sits along the fertile floodplain of the Ganges River Delta, and its geography has greatly affected its economic development. Bangladesh is one of the most densely populated countries on Earth, but the same swampy, fertile land that supports its growing population has also made infrastructure development notoriously difficult, resulting in one of the most bottlenecked transportation systems in the world.
Since the country gained independence from Pakistan in 1971, Bangladesh's history has been marked by deep political divisions, frequent military coups and decades of instability. This instability has helped keep the country poor and wages low. These circumstances gave rise to a textile manufacturing sector looking to take advantage of Bangladesh's favourable labour costs and geographic position within the broader Indo-Pacific region. But Bangladesh is still a victim of its weak political system and deep social divisions between the nationalist and centre-right and conservative Islamist elements of its society, resulting in the violent social unrest that has gripped the country for much of the current year.
The months leading into 2015 saw the Awami League enter a cautious dialogue with the opposition led by the arch rival Bangladesh National Party. Western capitals — including Washington and several EU members — that had decried the January 2014 elections and the Awami League's violent suppression of rival political demonstrations used their economic support to persuade Bangladeshi Prime Minister Sheikh Hasina's government to seek a compromise. This support is necessary for Bangladesh's economy; the European Union and United States are two of the largest markets for the country's ready-made garment exports. Especially concerning for Dhaka was the lifting of preferential trade conditions as a result of the controversy surrounding the 2014 elections. A primary motivator that influenced Hasina's government to negotiate with the Bangladesh National Party was Washington's decision to rescind Dhaka's Generalized System of Preferences status and EU threats to do the same.
The Awami League's cautious re-engagement with the Bangladesh National Party and the potential for a more politically and socially stable Bangladesh did not just offer benefits for the country's textile and garment industry. New Delhi was one of the few backers of the Awami League government in 2014. The closer ties between India and Bangladesh led to power transmission deals and the settlement of a long-lived maritime boundary dispute — one that expanded Dhaka's claims to a section of the Bay of Bengal, which may hold untapped deposits of natural gas, a significant boon to the electricity-starved economy. Dhaka also began expanding special economic zones along the coastal regions, wooing Chinese and Japanese investors drawn to Bangladesh's low wages in addition to its loose safety and environmental standards.
However, buoyed by rising international interest, Hasina's Awami League offered only token concessions to the opposition, which is led by the Bangladesh National Party's Begum Khaleda Zia. Noting the strong economic drivers behind the Awami League's outreach, the opposition coalition, which includes Islamist organization Jamaat-e-Islami, remained steadfast in its call for fresh elections overseen by a neutral caretaker Cabinet and its demand that Hasina step down as prime minister. The impasse carried over into 2015, with the opposition striking directly at the government's greatest vulnerability: the national economy and Bangladesh's highly vulnerable infrastructure system.
The Economic Impact of Unrest
Bangladesh's opposition parties, led by the right-of-centre Bangladesh Nationalist Party and its traditional Islamist partner Jamaat-e-Islami, launched a series of strikes, blockades and violent clashes coinciding with the first anniversary of the Jan. 5, 2014, national elections. Last year's polls represented a significant shift in Bangladesh's post-independence history. The incumbent centre-left Awami League sidelined the opposition through a series of constitutional changes, which include removing the military's ability to legally intervene in the political system, and by prosecuting Jamaat-e-Islami's leaders. The Bangladesh National Party and its political allies boycotted the elections, allowing the Awami League to claim a landslide victory despite criticism from the international community.
Bangladeshi Unrest and the Textiles Industry
Bangladesh's population of more than 150 million people relies on a congested and limited network of rail, road and ferry ways to move goods and people throughout the country. Groups of protesters burning tires and piles of trash have formed blockades across the country, effectively halting the movement of goods and people, often for days at a time. The economic impact can be seen everywhere. Crops have rotted in the field, garment factories have closed because of lost contracts and unemployment is rising as workers return from the cities to rural villages unable to find work. Domestic estimates place the economic cost of the unrest of the past three months at nearly $10 billion, a staggering sum given that Bangladesh's GDP is $150 billion.
Neither Hasina nor Zia have shown a willingness to negotiate. Traditionally, the military has been the arbiter in Bangladesh's often-chaotic political disputes, but the military leadership wants to avoid getting mired in the conflict for now because it could risk triggering greater unrest and violence. Zia's current strategy is to either force Hasina to capitulate or push the military to act, but the Awami League and the military are not likely to change their positions without a significant increase in violence and unrest.
Moreover, the military might not be the deciding factor in Bangladesh's current episode of unrest. During the past decade, professional organizations representing textile bosses have gained influence. Textiles and ready-made garments represent a significant portion of Bangladesh's economic activity, accounting for more than 60 percent of the country's industrial labor force and more than 80 percent of its annual exports by value. They are Dhaka's primary source of foreign currency revenue, which helps to lessen its negative trade balance. (Bangladesh still imports much of the basic resources needed for its garments trade, such as cotton, yarn and cloth, in addition to foodstuffs and fuel.)
Leaders of the three largest trade associations — the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association and Bangladesh Textile Mills Association — have enjoyed close ties to the Awami League and the Bangladesh National Party governments. Both parties have been careful to cultivate these relationships. But the Awami League now faces rising demands from the associations regarding better tax benefits, looser wage and safety restrictions, and subsidized electricity and fuel to offset losses from unrest. The associations also met with the U.S. ambassador to Bangladesh on March 5 to aid efforts by foreign governments and corporations to appeal to economic partners, rather than political ones, to pressure the government and the opposition to resume peaceful negotiations.
Economic Pressure Unlikely to Force a Deal
Bangladesh's current bout of political instability and violence is likely to continue during the months ahead. Political polarization, especially between the Bangladesh Nationalist Party's camp and the Awami League government, will remain as both sides extend their brinksmanship. Hasina seeks to exhaust opposition supporters, relying on arrests, crackdowns and threats of legal action against Bangladesh National Party and Jamaat-e-Islami leaders. The Bangladesh National Party hopes to make the economic pain unbearable, though it risks alienating the business community and Western governments as well; U.S. Secretary of State John Kerry has repeatedly asked the opposition to stop resorting to violence, even as he thanked the current Awami League government for its help in combating terrorism in late February. This is where the Awami League's slight advantage over the opposition become apparent, at least in its own eyes. The ruling government's stronger ties to neighbouring India, better counter-terrorism record and traditionally strong links to labour unions have all contributed to its decision to maintain its absolutist stance.
Recent statistics from the Bangladeshi government's Export Promotion Bureau show that garment exports are still rising, with year-on-year growth of 7.8 percent in January and 6 percent in February. While industry associations have tracked a nearly 50 percent decline in short-term orders from international companies — to the benefit of competing industries in Vietnam, Cambodia and Laos — Bangladesh's textile and ready-made garment industries have shown a remarkable resilience, even despite the political uncertainties of the past two years. The military remains cautious about triggering a widespread backlash against a coup and agitating rising Islamist tendencies. But with the economy still growing and support declining with every Bangladesh National Party call for strikes and shutdowns, there is not enough incentive for the military to get involved in a difficult and chaotic political competition it has not been able to resolve in the past 40 years. With the military repeatedly announcing that it has no plans to end the current impasse and the Awami League choosing to consolidate its power at the cost of delaying investment and economic revitalization, Bangladesh sees no quick or easy exit from instability.
First published in STRATFOR Global Intelligence, March 20, 2015
Tuesday, February 17, 2015
All set for Mamata Banerjee’s visit to Bangladesh, which usher hopes of taking the India-Bangladesh relations at new height, when her party is sailing through troubled waters.
West Bengal Chief Minister Mamata is arriving on an official visit to Dhaka during the observance of Ekushey February and opening of the International Mother Language Institute building at Kakrail on Basha Dibash (February 21).
Banerjee’s visit has acquired major significance especially against the backdrop of her resistance to sign the treaties back in 2011, when then Indian prime minister Manmohan Singh had to back off at the last minute due to her position.
Though her government has softened its stand against the LBA, not much progress has been made in the water sharing agreement, which has become a major point of conflict between the two neighbouring countries.
The All India Trinamool Congress (TMC) leader would be welcomed with open arms, but the Foreign Office was uncomfortable after media reports of arrival of controversial legislator Ahmed Hassan Imran.
A top Foreign Office official confirmed that the government has received the final and full list of entourage of Mamata Banerjee’s visit to Dhaka on February 19. The list does not have Imran’s name.
Diplomats in Bangladesh have been saying that it would not be right if Imran visited their country. The government have expressed reservations about Imran coming to Bangladesh, says the official.
Imran is a TMC lawmaker who was appointed to the Rajya Sabha. His appointment last year had created uproar as it came just after Indian security agencies dossier had flagged him for being sympathetic of the dreaded Jamaat-e-Islami and also blamed to destabilise the Awami League government.
During her visit to the Bangladesh capital, Mamata is expected to meet President Mohammad Abdul Hamid and Prime Minister Sheikh Hasina and discuss key treaties like the Teesta water sharing agreement and the Land Boundary Agreement (LBA) between the two neighbouring countries.
During his lasts visit to Kolkata Bangladesh Finance Minister A.M. Abdul Muhith had hoped that Banerjee would visit the country soon.
However, Dhaka and New Delhi are both anxious for a positive response during her visit, during which both the countries hope to solve the difference in the two treaties that have soured their relationship in the recent past.
Meanwhile, Mamata seem in trouble and she remarked on Monday that her party is strong and united, amidst reports of TMC general secretary Mukul Roy forming a new political outfit.
Later Mukul Roy was left in the cold by Banerjee in an organisational shake-up that took place.
West Bengal Chief Minister Mamata Banerjee's party lawmaker has dared her to punish him for writing to the central government directly about corruption in his constituency.
The legislator has been in the spotlight for alleging that "extortionists in the Trinamool are not allowing good people to work."
On the other hand, Mamata’s Bangladesh visit has caught the ire of controversial writer Taslima Nasreen, who has alleged that she was shielding Muslim radicals in her state.
Saleem Samad, is an Ashoka Fellow for journalism and an award winning investigative reporter. He has worked as news reporter for Time magazine and presently is news correspondent for The Daily Observer, Paris based Reporters Without Borders (RSF) and regular contributor for prestigious international magazine India Today.
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Wednesday, December 24, 2014
S. BINODKUMAR SINGH
On December 18, 2014, the International Crimes Tribunal-2 (ICT-2) indicted Forkan Mallik, an alleged Razakar (a paramilitary force organized by the Pakistan Army) commander from Mirzaganj sub-District in Patuakhali District, for his involvement in crimes against humanity during the Liberation War of 1971. The tribunal framed five charges against Forkan, a supporter of the main opposition Bangladesh Nationalist Party (BNP).
On November 24, 2014, ICT-1 awarded the death penalty to Mobarak Hossain aka Mobarak Ali (64), former rukon (union member) of the Jamaat-e-Islami (JeI) and commander of the Razakar force. Mobarak was indicted on April 23, 2013, on five specific incidents of murder, abduction, confinement, torture and loot.
On November 13, 2014, ICT-1 sentenced Zahid Hossain Khokon alias Khokon (70), vice-president of BNP's Nagarkanda unit and a Razakar commander of Faridpur District, to death in absentia. Khokon was indicted on October 9, 2013, on 11 charges, including genocide, torture, abduction and confinement during the Liberation War. He is absconding and, while Bangladeshi authorities say they have no information regarding his whereabouts, reports suggest that he may be residing in Sweden with his elder son and daughter.
The War Crimes (WC) Trials began on March 25, 2010, and through 2014, the two ICTs indicted nine persons and delivered four verdicts. Thus far, the ICTs have indicted 25 leaders, including 13 from JeI, five from Muslim League (ML), four from BNP, two from Jatiya Party (JP) and one Nizam-e-Islami leader. Verdicts against 14 of them have already been delivered – 12 were awarded death sentence while the remaining two received life sentences. One of the 12 who received the death sentence has already been executed, while the remaining 11 death penalties are yet to be executed. The two persons who were awarded life sentences have already died serving their sentence. They were JeI Ameer (Chief) Ghulam Azam (91), who died on October 23, 2014; and former BNP minister Abdul Alim (83), who died on August 30, 2014.
Sheikh Hasina Wajed’s Awami League (AL)-led Government, which retained power winning the 10th General Elections held on January 5, 2014 in the face of a comprehensive Opposition boycott, has enormously consolidated its secular commitments and kept its promise to punish the perpetrators of the 1971 genocide. By bringing the war crimes' perpetrators to justice, Dhaka has also succeeded in minimizing the threat of Islamist extremists within the country, both because they have become conscious of the clear intent of the incumbent Government, and because many of their top leaders are among those arraigned or convicted for the War Crimes.
The Government also remained determined in its approach to dealing with JeI, the country's largest right-wing party and main Islamist extremist troublemaker. Law Minister Anisul Huq, speaking at Dhaka city on December 7, 2014, announced, "The Draft Bill to ban JeI will be placed in the Cabinet this month and it is expected to be passed in the first session of the Parliament in 2015." Notably, in a landmark ruling, the Dhaka High Court, on August 1, 2013, had declared the registration of JeI as a political party, illegal. A three-member Special Bench, including Justice M. Moazzam Husain, Justice M. Enayetur Rahim and Justice Quazi Reza-Ul Hoque, passed the judgment, accepting a writ petition challenging the legality of JeI's registration as a political party.
Further, in a major blow to JeI, Election Commissioner Shah Nawaz, on November 7, 2013, declared that the party could not participate in the General Elections of January 2014, in line with the High Court order. JeI was, of course, one of the Opposition parties that boycotted the Election.
Significantly, Security Force (SF) personnel arrested at least 1,757 cadres of JeI and Islami Chhatra Shibir (ICS), the student wing of JeI, through 2014, in addition to 4,038 such arrests in 2013.
Nevertheless, disruptive elements led by the BNP-JeI-ICS combine, continued to engage in violent activities through 2014. According to partial data compiled by the South Asia Terrorism Portal (SATP), a total of 60 people, including 29 civilians, nine SF personnel and 22 extremists, were killed in incidents related to Islamist extremism in 2014 (data till December 21), in addition to 379 persons, including 228 civilians, 18 SF personnel and 133 extremists, killed in 2013.
As the Government continued with its policy of checking the growth of Islamist extremist forces led by the BNP-JeI-ICS combine, it deprived the Islamist terrorist formations of any opportunity to revive their activities within the country, despite sustained efforts, through 2014. The Rapid Action Battalion (RAB) arrested JMB chief coordinator Abdun Noor and four of his close aides from the Sadar Sub-District Railway Station of Sirajganj District, on October 31, 2014, and recovered 49 detonators, 26 electronic detonators, four time bombs, 155 different kinds of circuits, 55 jihadi books, and a power regulator. During preliminary interrogations, the JMB operatives confessed that they were planning to carry out large-scale bomb attacks across the country, particularly in Dhaka city.
In a disturbing development, the Detective Branch (DB) of Dhaka Metropolitan Police (DMP) arrested two cadres of the Ansarul Bangla Team (ABT), Tanjil Hossain Babu (26), who had some technological expertise, and Muhamad Golam Maula Mohan (25), a Computer Sciences and Engineering graduate, along with a plastic frame of a drone, electronic devices and some books on jihad, from Dhaka city's Jatrabari area on December 16, 2014. After their interrogation, Joint Commissioner Monirul Islam of DB claimed, "They reached the final stages of making the drone after a six-month planning and research. Once completed, the drone could be flown up to around 25th floor of a building to launch an attack." ABT is an al Qaeda inspired terrorist formation that crystallized in 2013 from the remnants of the Jamaat-ul-Muslimeen.
Nevertheless, under the sustained pressure exerted by Security Forces, the country did not record a single major terrorist incident (resulting in three or more fatalities) by any Islamist terror outfit through 2014. In fact, only one violent incident involving such groups was reported through the year. On February 23, 2014, a Police Constable was killed and another two Policemen were injured, as an armed gang of 10 to 15 unidentified terrorists ambushed a prison van that was carrying three convicted Jama'at-ul-Mujahideen Bangladesh (JMB) terrorists in the Trishal Sub-District of Mymensingh District. All the three convicts managed to escape during the ambush. Though Police arrested one of them soon after, the whereabouts of the other two remain unknown.
On the other hand, a total of 96 terrorists were arrested through 2014, adding to the 163 detained in 2013. Of these 96, 43 belonged to JMB, 25 to Hizb-ut-Tahrir (HuT), 12 to Harkat-ul-Jihad-al Islami Bangladesh (HuJI-B), six to Kalamaye Jamaat, five to ABT, three to Hizb-ut-Towhid (HT), and one each to Kalema Dawat and Islamic State.
Dhaka has also continued its campaign against an incipient Left Wing Extremist (LWE) movement in a somewhat one-sided battle. Through 2014, 16 LWE cadres were killed - 11 of the Purbo Banglar Communist Party (PBCP), three of the Purbo Banglar Sarbahara Party (PBSP), one of the Biplobi Communist Party (BCP), and one unidentified. No civilian or SF fatality took place in LWE-linked violence through 2014. In 2013, a total of 25 fatalities were connected to LWE violence, including four civilians and 21 militants.
The nation, however, continues to face a significant threat from Islamist extremism. India’s National Investigation Agency (NIA), investigating the October 2, 2014, accidental blasts at Burdwan in West Bengal, uncovered a plot by JMB to assassinate Prime Minister Sheikh Hasina Wajed and BNP Chairperson Begum Khaleda Zia.
According to revelations made by arrested accused in the case, JMB was planning to establish an 'Islamic state' in Bangladesh through armed struggle. The projected 'Islamic state' was also intended to incorporate the Districts of Murshidabad, Nadia, and Malda in West Bengal. Referring to the development, Bangladesh's National and Security Intelligence (NSI) Director General, Mohammad Shamsul Haque, observed, on December 15, 2014,
We have largely neutralized radical groups like the JMB or HuJI-B, but now they seem to have found sanctuaries across the border. If we think we have neutralized a group and sit easy, it is (a) big mistake. There is no room for complacency. We need to closely monitor their activities even if a few terrorists are left in the fray. Because they may well set up bases across the border, make fresh recruitment, acquire weapons and plan attacks.
Further, on September 5, 2014, Asim Umar, the leader of the newly formed al-Qaeda in the Indian Subcontinent (AQIS) based in Pakistan, incited Muslims to engage in the global jihad (holy war) and expressed his group’s determination to extend the fighting from Pakistan to Bangladesh, Myanmar and India. Further, a video released on November 29, 2014, and attributed to the 'Bangladesh division' of AQIS, encouraged Bangladeshi Muslims to come to the jihadi battlefield and included glimpses of a base of fighters in the Afghanistan-Pakistan region.
Threats from the Islamic State (IS, formerly the Islamic State of Iraq and al Sham, ISIS) are also very much a reality. On September 29, 2014, a 24-year-old British citizen was arrested in Dhaka city on suspicion of recruiting people to fight alongside IS cadres in Syria. When asked about Bangladesh’s position on the IS and the Syrian crisis, Foreign Minister A.H. Mahmood Ali disclosed, on September 30, 2014, “We have not heard about any presence of the [ISIS] group, but a British citizen of Bangladeshi origin was arrested.”
Bangladesh’s achievements on the counter-terrorism and internal security fronts through 2014 have been remarkable. Further, over the last few years, the WC Trials have also progressed quite well. A note of caution, nevertheless, remains to be sounded, as the residual capacities of subversive and extremist elements, prominently including JeI-ICS, are still significant, and their alliance with BNP remains sound. Further, surviving fragments of a range of other outfits, including JMB, HuT, HT, HuJI and ABT, also have a potential for regrouping and fomenting violence. In the unstable environment of South Asia and the wider Asian region, there is little space for complacence.
First published in South Asia Intelligence Review, Weekly Assessments & Briefings, Volume 13, No. 25, December 22, 2014
S. Binodkumar Singh is Research Associate, Institute for Conflict Management, India
Thursday, December 18, 2014
First published in South Asia Intelligence Review, Weekly Assessments & Briefings, Volume 13, No. 24, December 15, 2014
Sanchita Bhattacharya is Research Associate, Institute for Conflict Management, India
Identifying and neutralising the sources of terrorist funding have become global concerns. The United States' Ambassador to Bangladesh, Dan W. Mozena, on December 10, 2014, asserted, "The terrorists who seek to destroy our communities of peace, diversity and tolerance have developed many avenues for generating money to fuel their vast machines of death...One source of financing terrorism and violent extremism is charity, the vast network of charitable organisations thrives across South Asia and we must fight back against it."
Echoing similar concerns, Bangladesh Law Minister Anisul Huq stated, as reported on December 10, 2014, that millions of dollars were collected every year in the name of benevolence and charitable activities but a portion of it, either by design or exploitation of organisational structure, is diverted to fund acts of terrorism. The fight against terrorism should be a global and collaborative effort so that charitable and Non-Government Organisation (NGO) activities do no turn into support for terrorism, he added.
Bangladesh has a history of involvement in money-laundering and terrorist financing cases. Interestingly, the Bangladesh Cabinet, on December 1, 2014, approved the draft of the much awaited Foreign Contributions (Voluntary Activities) Regulation Act, 2014, intended to regulate the flow of foreign aid being channelled to non-profit groups. The approval was given in the weekly meeting of the Cabinet held at the Bangladesh Secretariat, with Prime Minister Sheikh Hasina Wajed in the Chair. The proposed draft law is intended to ensure transparency, accountability, proper inspection, monitoring, evaluation and appropriate use of foreign funds by NGOs.
Cabinet Secretary M. Musharraf Hossain Bhuiyan subsequently stated, "No NGO will be able to run its activities without taking registration from the NGO Affairs Bureau. No registration is required in case of individuals, but approval has to be taken from the Bureau... The proposed law has also a provision for punishment, cancellation of registration and imposition of fines for violating the law".
The Act is supposed to be a comprehensive and wide ranging legal instrument to provide support and regulation of NGO activities. It has been prepared by integrating two previous legal instruments: The Foreign Donations Voluntary Activities Regulation Ordinance, 1978; and the Foreign Contributions Regulation Ordinance, 1982.
December 6, 2014, reports indicated that Bangladesh Bank, the country's central bank, had also asked commercial banks to take effective measures under the anti-money laundering and anti-terror financing laws to check illegal fund transfer and associated pecuniary offences. Bangladesh Bank Governor Atiur Rahman noted that money-laundering offences hindered the socio-economic development of the country: "Such risk will increase gradually if money laundering is not prevented effectively... Recently, different banks have been fined due to non-compliance with the KYC provisions."
The previous Money Laundering Prevention Act, 2012 and Anti Terrorism Amendment Act, 2013 also sought to regularise financial activities. The 2013 Act, provides capital punishment as highest penalty for terrorism and subversive activities. Further, it allowed the courts to accept videos, still photographs, and audio clips used in facebook, twitter, skype and other social media, as evidence. In December 2014, eight banks in Bangladesh were fined for not keeping client affidavits and not informing authorities of suspicious transactions in time. The banks include: Islami Bank, Premier Bank Limited, BRAC Bank, Mercantile Bank, Dutch-Bangla Bank, Southeast Bank, Uttara Bank and Bangladesh Investment Finance Corporation. They were slapped with fines ranging from Tk 200,000 to Tk 2 million under the law to prevent money laundering, Mohammad Mahfuzur Rahman, Deputy Head of the Bangladesh Financial Intelligence Unit (FIU) disclosed.
In order to extract information on money laundering by various elements, the Anti Corruption Commission (ACC), in the month of November 2014, sent Mutual Legal Assistance Requests (MLAR) to 14 countries, for information regarding alleged money laundering by the country's businessmen, politicians, industrialist, and government officials. However, ACC Secretary M. Maksudul Hasan Khan did not disclose the names of the 14 countries and the suspected money launderers.
Bangladesh has long been plagued by illicit financial transfers from both national and international sources. It is suspected that militants regularly tap into these illegal money flows to fund their operations. Money laundering is also a prime way of generating funds. Remittances from expatriate Bangladeshis working in the Middle East, the United Kingdom and elsewhere, are a further area of concern. There is a broad consensus that such techniques are used by militant organisations. One of the most significant links to funding from the Diaspora was uncovered in March 2009, when a madrasa (Islamic seminary) in Bhola District in southern Bangladesh was raided by an anti-terrorist unit, which seized 10 firearms, 2,500 rounds of ammunition and radical Islamic literature. Subsequent investigations revealed that the madrasa was funded by the British-registered charity Green Crescent.
Further, the Saudi Arabia-based al-Haramain Islamic Foundation, banned internationally by United Nations Security Council (UNSC) Resolution 1267, along with other charities from the Middle East, is infamous for financing terrorism in Bangladesh. NGOs and charities, such as the Kuwait-based Revival of Islamic Heritage Society (RIHS) and the Saudi Arabian Hayatul Igachha (HI), have also been linked to Islamist extremism in the country.
The Islami Bank Bangladesh Limited (IBBL) reportedly handled accounts of various Wahhabi organisations, that propagate radical Islam in the country. In 2011, the Bangladeshi Home Ministry intelligence revealed that eight per cent of the Bank's profits were diverted to support jihad in Bangladesh. Another sharia bank, Social Islami Bank, worked with HSBC. In 2011, the US Senate implicated HSBC for disregarding evidence of terror financing at the Social Islami Bank.
More recently in February 2014, UNSC provided definite information that al Qaeda network was active in Bangladesh. The UN has indicated that two NGOs, Global Relief Foundation and al-Haramain Islamic Foundation, working in Bangladesh, were involved with al Qaeda.
In a positive initiative, the Shiekh Hasina-led Government is not only trying to monitor and regulate NGO-related funding channels and activities, but, at the same time, is also looking into the bigger picture of financial fraud and terror connections. The existence of financial networks related to the infrastructure of terrorism in Bangladesh constitute a serious threat not only to the country itself, but to the stability of the wider region as well.
First published in South Asia Intelligence Review, Weekly Assessments & Briefings, Volume 13, No. 24, December 15, 2014
Sanchita Bhattacharya is Research Associate, Institute for Conflict Management, India
Sunday, November 09, 2014
JSD was not ready for Nov 7 Sepoy Mutiny
Saleem Samad, an Ashoka Fellow (USA) is an award winning investigative reporter based in Bangladesh. Email
The Biplobi Sainik Sangstha (Revolutionary Sepoy’s Organisation) was never heard of in early 1970s. The clandestine organisation’s hard-core members were mostly Junior and Non-Commissioned Officers of Bangladesh Army. The recruits of the secret group were loyal to dismissed Maj Mohammad Abdul Jalil, Commander of Sector 9 of Mukti Bahini.
The secret group began its journey on January 1, 1973 at the staff quarters of Havildar Bari of Armoured Corps. The members were drawn from serving Junior and Non-Commissioned Officers. On the founding day of the ‘Bangladesh Revolutionary and Suicide Commando Force’ they took solemn oath by touching the Holy Qur’an.
The underground Biplobi Sainik Sangstha’s members held secret meetings at Ahsanullah Hall of Bangladesh University of Engineering and Technology (BUET). The political wisdom, mission and visions of the revolution were tutored by Sirajul Alam Khan, political theorist and founder of the Jatiya Samjtantrik Dal (JSD) and Dr Akhlaqur Rahman, an economist.
Days after Maj Jalil was imprisoned on March 17, 1974, he send secret message to the underground organisation’s leader Corporal Altaf Hossain to contact Col Abu Taher (Bir Uttam) and seek directives from the former commander of Sector 11.
Corporal Hossain was the key person to organise the soldiers in various cantonments and motivate them to join the revolution.
On June 20, 1974, a secret meeting presided by Col Taher was organised at Sergeant Abu Yusuf Khan’s residence at Elephant Road. The retired Sector Commander told the dedicated group that his friend Maj Gen Ziaur Rahman, who was Deputy Chief of Army Staff has expressed solidarity with the group and will support their revolution.
The statement has raised the morale of the junior officers. Since then the activities of the Revolutionary Commando Force were held openly.
On the other side, most soldiers of Sector 11 and loyal to Taher joined ‘Biplobi Sainik Sangstha’ also many soldiers in Comilla Cantonment where he (Taher) once served as Commanding Officer also joined the group. He advocated for ‘People’s Army’ and through ‘class struggle’ drew political support of the soldiers.
Soon the Revolutionary Commando Force and other smaller groups among the soldiers merged into Biplobi Sainik Sangstha, after the crisis created following the assassination of the Father of the Nation Sheikh Mujibur Rahman in a military putsch.
Taher knew his limitation and was not a protagonist of the revolution. He decided to use Zia’s image among the soldiers to expedite the revolution. In a bid to garner more support of the soldiers he included in the Sainik Sangstha a 12-point demands for the realisation of 18 months of unpaid wages of repatriated soldiers from Pakistan. This was debated by former Mukti Bahini soldiers and was not discussed at the high command of the JSD.
Taher also formed strategic alliance with the pro-Peking (now Beijing) left groups and parties who participated in the Liberation War to form liberated areas in rural regions, so that the radical groups can create pressure on the capital Dhaka.
JSD radical political philosophy was similar to the Sainik Sangstha revolution to overthrow the autocratic regime to establish a pro-people, farmers, soldiers, workers and students national government.
On November 6, JSD party forum held an emergency standing committee meeting at a residence in Kalabagan. The meeting was attended by Sirajul Alam Khan, Aklaqur Rahman, Monirul Islam, Hasanul Haque Inu and Khair Ejaz Masud and others, writes Mohiuddin Ahmed in his recent book “Jashoder Utthan Poton: Osthir Somoyer Rajniti, Protoma Prokashon.
The agenda for discussion was to organise an indefinite shut down (hartal). A show down of strength was planned at Paltan Maidan on November 9. JSD leaders expected that thousands of industrial workers from Adamjee, Tejgaon and Tongi would participate and block the capital Dhaka for days, until the government collapse and form a national government with all parties, minus the BAKSAL leadership. Unfortunately the plan was abandoned, due to abrupt Sepoy Mutiny.
While the meeting was in progress, Taher walked in and sat to listen to the discussion. Surprisingly the Sepoy Mutiny was not in the agenda. Possibly the key leaders had no knowledge that a mutiny was brewing.
After a while, a young military officer in civilian dress barged into the meeting room, without causing any alarm among the key leaders sitting there. He whispered in the ears of Taher and handed over to him two small pieces of papers.
Once the officer departed, Taher drew the attention of the meeting and read out one message which came from Gen Zia. Which reads: “I am interned, I can’t take the lead. My men are there. If you take the lead, my men will join you.”
Those present at the meeting have never met Zia and does not know him. The first reaction came from Akhlaqur Rahman, who refused to accept Gen Zia as their leader. All the leaders had one question, whether Zia should be trusted? Taher promptly responded and confidently said, “If you trust me, then you can also trust Zia. He will be under my feet.”
He also informed the meeting that he has instructed the Sainik Sangstha to begin the revolution. Immediately all the members in the room were baffled by the announcement. The meeting tried to influence Taher to withdraw the call for mutiny. He said it was impossible to reach the decision as the communication is a one-way traffic.
The second message was from the command centre of the soldiers planning the mutiny at midnight following November 6. It reads: “Khaled Mussaraf men are moving fast. The iron is too hot. It is time to hit.”
Taher took the floor and said like what happened in the Bolshevik Revolution – Tonight or never. Sirajul Alam Khan did not say yes or no to the plan. The leaders continued to pursue Taher and frustrated the meeting abruptly ended without any plan, Mohiuddin writes.
F Rahman Hall at Dhaka University was converted into a clandestine command centre for the November 7 Sepoy Mutiny led by Col Abu Taher, commander of Gono Bahni (People’s Army).
A nervous mutineer Subedar Mehboob rang the shot an hour early than determined at 1 O’clock. The single shot at midnight from a rifle, triggered the revolution of soldiers. Thousands of soldiers joined the mutiny broke the military armoury to loot weapons and boarded trucks and jeeps and took control of strategic points.
A contingent rushed to Gen Zia’s residence to free him from house-arrest in Dhaka Cantonment hours after Maj Khaled Musharraf's coup d'etat on November 3. Taher drove in a military jeep with few JSD leaders and met Zia. “You have saved the nation,” he admired Taher amidst cheering soldiers.
Zia asked Taher of the whereabouts of Sirajul Alam Khan. It was presumed that Zia wanted to meet the top leaders of JSD, which never happened.
Since the meeting held on the eve of November 7, Sirajul Alam Khan, Akhlaqur Rahman and many senior leaders opted to maintain low profile. Possibly they believed that the mutiny would fail, and it failed.
Mohiuddin in his book writes that despite request by Taher, Zia refused to go to the radio station on an excuse that his statement could be recorded and broadcast. At the radio station Shamsuddin Ahmed, a young Turk of the Gana Bahini read out a statement which announced the Sepoy Mutiny. Unfortunately, the announcer did not mention the name of Taher or other JSD leaders or even his name.
On November 23, 1975, Zia also ordered the arrest of JSD leaders. A large police contingent surrounded the house of Col Taher's brother Sergeant Abu Yusuf Khan and took him to the police control room.
When Col Taher heard about his brother’s arrest, he rang Gen Zia but was told that he was not available. Instead Maj Gen HM Ershad, the Deputy Chief Martial Law Administrator, spoke with him. Ershad said it was a police matter and they knew nothing about it, writes Talukder Maniruzzaman in “Bangladesh in 1976: Struggle for Survival as an Independent State,” published in Asian Survey in February 1977.
The following day Taher was arrested 16 days after freeing Ziaur Rahman and was taken to Dhaka Central Jail. He was accused of 'instigating indiscipline' in the army and attempting to expand the original mutiny of November 7, 1975 towards a goal of "socialist revolution" and to kill some of the army officers.
Abu Taher's Last Testament: Bangladesh: The Unfinished Revolution by Lawrence Lifschultz published in Economic and Political Weekly, India in August 1977: “It became very clear to me that a new conspiracy had taken control of those we had brought to power on November 7 in 1975.”
“On November 24, 1975, I was surrounded by a large contingent of police. The police officer asked me to accompany him for discussion with Zia. I said I was surprised and I asked him why there was need of a police guard for me to go to Zia. Anyway they put me in a jeep and drove me straight to this jail. This is how I was put inside this jail by those traitors who I saved and brought to power.”
“In our history, there is only one example of such treachery. It was the treachery of Mir Zafar who betrayed the people of Bangladesh and the subcontinent and led us into slavery for a period of 200 years. Fortunately for us it is not 1757. It is 1976 and we have revolutionary soldiers and a revolutionary people who will destroy the conspiracy of traitors like Ziaur Rahman,” the statement concluded.
The Supreme Court has recently described the execution of Taher through an order of a military tribunal in 1976 as ‘outright murder’. It says the hanging of Taher was ‘illegal’ and a case of ‘cold blooded assassination’.
Saleem Samad, an Ashoka Fellow (USA) is an award winning investigative reporter based in Bangladesh. Email
Thursday, November 06, 2014
S. BINODKUMAR SINGH
After forty-three years, justice finally caught up with Jamaat-e-Islami (JeI) ameer (chief) Motiur Rahman Nizami (71) as the International Crimes Tribunal-1 (ICT-1), one of the two War Crimes Tribunals constituted by the Sheikh Hasina Wajed Government, sentenced him to death on October 29, 2014, for atrocities during the Liberation War of 1971. Nizami was found guilty on eight of the 16 charges brought against him. The four charges which brought him death included involvement in the killing of intellectuals; the murder of 450 civilians; rape in Bausgari and Demra villages in Pabna District; the killing of 52 people in Dhulaura village in Pabna District; and killings of 10 people and rape of three women in Karamja village in Pabna District. He was also sentenced to imprisonment for life on the charges of involvement in the killing of Kasim Uddin and two others in Pabna District; torture and murder of Sohrab Ali of Brishalikha village in Pabna District; torture and killing at Mohammadpur Physical Training Centre in Dhaka city; and killing of freedom fighters Rumi, Bodi, Jewel and Azad at Old MP Hostel in Dhaka city.
Nizami, at that time, was the President of the Islami Chhatra Sangha, the students’ wing of JeI, the precursor of the present-day Islami Chhatra Shibir (ICS), and was also ex-officio chief of Al-Badr, a paramilitary wing of the Pakistan Army in 1971. As a leader, he not only took part in crimes against humanity, the judgment reads, but also delivered provocative speeches to incite thousands of his followers to commit similar crimes during the Liberation War. However, instead of being punished for the heinous crimes, President Ziaur Rahman permitted Nizami and other leaders of the JeI to revive the party in 1978. The JeI subsequently emerged as the largest Islamist party in the country and Nizami established himself as a key leader, organizing the ICS. He became JeI ameer in November 2000, and also served as the Minister of Agriculture (from October 10, 2001, to May 22, 2003) and Minister of Industries (from May 22, 2003 to October 28, 2006) in the Begum Khaleda Zia’s Bangladesh Nationalist Party (BNP)-led Government between 2001 and 2006.
Nizami was first arrested on June 29, 2010, in a lawsuit for hurting religious sentiments. After three days, he was shown arrested for committing crimes against humanity during the Liberation War. Subsequently, on May 28, 2012, he was indicted on 16 specific charges for his involvement in War Crimes. It took around 29 months to go from the indictment to the sentencing, as the verdict was deferred three times in the past.
Earlier, on January 30, 2014, the Chittagong Metropolitan Special Tribunal-1 had awarded the death penalty to Nizami in the sensational 10-truck arms haul case of 2004, the country’s biggest ever weapons haul case. On February 7, 2014, the verdict on the arms haul case was transferred to the Chittagong High Court for confirmation of its sentences. Nizami filed an appeal with the Chittagong High Court seeking acquittal from the charges and, on April 16, 2014, the Chittagong High Court accepted the appeal. The case is still pending in the High Court.
Meanwhile, as in earlier cases, soon after the verdict, cadres of JeI and its student wing ICS went on rampage across the country. 30 persons, including 28 JeI-ICS cadres and two Security Force (SF) personnel have been injured in violence across the country, thus far. 71 JeI-ICS cadres were also arrested from various parts of the country for bringing out processions. The JeI called for a countrywide hartal (general strike) on October 30, November 2 and November 3
The verdict has attracted some negative international attention. Calling for a commutation of Nizami’s death sentence, the European Union (EU), in a statement on October 29, 2014, declared, “The case of Motiur Rahman Nizami has now reached a stage where an execution of the death sentence constitutes a serious threat.” On October 29, the United States (US) reiterated its support to bringing to justice those who committed atrocities during the Liberation War, but demanded that the trials should be fair and transparent maintaining the international standards.
On the other hand, minutes after the news of Nizami’s death penalty reached the Shahbagh intersection in Dhaka city on October 29, Gonojagoron Mancha (People’s Resurgence Platform) activists erupted into exhilarated cheers. Showing victory signs, they demanded the immediate execution of the verdict, chanting slogans like “we demand hanging”.
Meanwhile, on November 2, 2014, ICT-2 sentenced JeI central executive committee member Mir Quasem Ali (62) to death after finding him guilty on two charges, one for abduction, torture and killing of 15-year-old freedom fighter Jasim of Sandwip Sub-District in Chittagong District; another for abducting, torturing and killing Ranjit Das alias Lathu and Tuntu Sen alias Raju of Chittagong town in Chittagong District. Quasem, considered one of the top financiers of JeI, faces 14 charges, including murder, abduction and torture committed in Chittagong city between November and December 16, 1971. He was allegedly the chief of the Chittagong Al-Badr and was indicted on September 5, 2013, after being arrested on June 17, 2013.
Thus far, the two ICTs conducting the War Crimes Trials, which began on March 25, 2010, have indicted 18 leaders, including 13 JeI leaders, three BNP leaders and two Jatiya Party (JP) leaders. Verdicts against 12 of them (including Nizami and Quasem) have already been delivered, in which nine persons have been awarded the death sentence (including Nizami and Quasem), while three have been sentenced to life imprisonment. Remarkably, in the first-ever execution in a War Crimes case, JeI Assistant Secretary Abdul Quader Mollah (65), who earned the nickname Mirpurer Koshai (Butcher of Mirpur), was hanged on December 12, 2013, at Dhaka Central Jail, against his conviction on charges of atrocities committed during the Liberation Wars of 1971. Of the six other convicts who were awarded death sentences, three – Al-Badr leaders Mohammad Ashrafuzzaman Khan and Chowdhury Mueenuddin, and JeI leader Maulana Abul Kalam Azad – were awarded sentences in absentia. The verdicts against JeI leaders Ali Ahsan Mohammad Mojaheed and Muhammad Kamaruzzaman, and BNP leader Salauddin Quader Chowdhury, are currently pending with the Appellate Division.
Significantly, former JeI Chief Ghulam Azam (92), who led the JeI during the country’s Liberation War in 1971, died at the Bangabandhu Sheikh Mujib Medical University (BSMMU) in Dhaka city after suffering a stroke on October 23, 2014. Azam had served a year and three months of his 90-year jail term for crimes against humanity. Protest rallies by opponents of JeI were held during his funeral at Baitul Mokarram National Mosque in Dhaka city, demanding that his body be sent to Pakistan for burial there. Ziaul Hasan, chairman of Bangladesh Sommilito Islami Jote, an alliance of progressive Islamic parties, observed, “The janaza (mourning procession) of a war criminal can never be held at the national mosque.”
The verdict against the JeI chief is a body blow to the organization. The Government is already considering banning JeI, which was debarred on August 1, 2013, from contesting elections. Awami League (AL) Joint Secretary Mahbub-ul-Alam Hanif on October 29, 2014, noted, “The verdict has once again proved that JeI was involved in war crimes with a political decision.” With its very existence now under threat, JeI attempts to retaliate violently are imminent, and likely to vitiate the security environment of the country.
Compounding the problem are the recent activities of other Islamist extremist and terrorist groups, particularly the Jama’atul Mujahideen Bangladesh (JMB). On September 22, 2014, the Detectives Branch (DB) of the Police claimed that 25 top leaders of JMB and seven other Islamist outfits, including Ansarullah Bangla Team (ABT), Jamaatul Muslemin, Majlish-e-Tamuddin, Hizbul Zihad, Hizbut Tahrik, Jamaatil Muslemin and Dawatul Jihad, discussed a regrouping plan at a meeting in a remote char (riverine island) area at Sariakandi sub-District in Bogra District on May 5, 2014. More recently, the Rapid Action Battalion (RAB) arrested JMB’s chief coordinator Abdun Noor and four of his close aides from the Sadar sub-District Railway Station in Sirajganj District on October 31, 2014. 49 primary detonators, 26 electronic detonators, four time bombs, 10 kilograms of power gel, 155 different kinds of circuits, 55 jihadi books and a power regulator were recovered from the JMB cadres. During preliminary interrogation, the JMB operatives confessed that they were planning to carry out large-scale bomb attacks across the country, particularly in Dhaka city.
Remarkably, India’s National Investigation Agency (NIA), currently investigating the October 2, 2014, Burdwan (West Bengal, India) blast case, on October 28, 2014, uncovered a suspected plot by JMB to assassinate Prime Minister Sheikh Hasina Wajed and carry out a coup. The JMB had also planned to assassinate BNP Chairperson Begum Khaleda Zia. Earlier, on October 27, 2014, Indian investigators had revealed that the JMB module in Burdwan had managed to transport six consignments of Improvised Explosive Devices (IEDs) to Bangladesh, to be used for terrorist activities in the country.
The War Crimes Trials, and the cumulative verdicts against leaders of extremist parties and groups that have been at the core of destabilization in Bangladesh over the past decades, have been crucial in turning the country around after years of mounting chaos that had brought it to the very brink of failure. This process needs to be sustained, indeed, accelerated, despite the backlash of extremist entities, if the gains of the recent past are to be consolidated.
First published in South AsiaIntelligence Review, Weekly Assessments & Briefings, Volume 13, No. 18, November 5, 2014
Research Associate, Institute for Conflict Management
Monday, October 13, 2014
Tahmima Anam, a writer and anthropologist, is the author of the novel “A Golden Age.”
In Bangladesh, we sometimes play We Also Have. This is a parlor game in which we can say, with pride, that we now have the things that could previously be found only in other countries.
In the 1990s, it was satellite television (we also have MTV!); in the 2000s, it was shopping malls and high-rise buildings and multiplex cinemas. This year, it was a Hollywood-style bank heist.
In January, a man going by the name of Sohel and his accomplice Idris successfully stole 169 million taka (about $2.2 million) from a branch of Sonali Bank in Kishoreganj, 70 miles north of the capital, Dhaka.
Although “Sohel,” later identified as Yusuf Munshi, his brother Idris Munshi and a number of other accomplices were arrested within days of the robbery, it was all anyone could talk about for weeks afterward. We devoured the details of the heist: how Mr. Munshi had plotted for two years to rob the bank, how he had rented a house next door and dug a 30-foot tunnel to reach the bank’s vault.
It was even reported that he had had an affair with a bank employee as part of his scheme. Social media exploded with comparisons with Hollywood movies such as “The Bank Job.”
It appears Mr. Munshi has started a trend. In March, 3 million taka (about $40,000) was stolen from Sonali Bank’s Adamdighi branch in Bogra, when thieves used the same technique — digging a tunnel into the vault from a nearby furniture shop. And last month, criminals made away with almost 20 million taka ($260,000) from a Brac Bank branch in the small town of Joypurhat by boring a hole from a neighboring building. When renting the office next door, the robbers had claimed to be starting a nonprofit agency called Poor Development. Oh yes, in Bangladesh, we also have irony.
But while our attention is drawn to this proliferation of movie-style heists, the larger irony is that Mr. Munshi and his copycat criminals are not the real bank robbers. No, the bigger thieves are hiding in plain sight, and sanctioned by the banks themselves. They are the loan defaulters: people and businesses who borrow money from banks with no intention of repaying the debt.
The problem, it seems, is the way Bangladesh’s banking sector is organized. There are broadly two types of banks: private banks, which are overseen by the central bank, and state-run commercial banks, which fall directly under the aegis of the Finance Ministry. While private banks have had their share of loan defaulters (sometimes those who sit on the boards of these banks), it is overwhelmingly the state-run banks that have allowed bad loans to multiply to an unsustainable degree. The international standard for loan defaults is currently at about 2 to 3 percent. In Bangladesh, it is over 12 percent. In a recent study conducted by the Bangladesh Institute of Bank Management, the percentage of nonperforming loans in state-run banks is as high as 29 percent.
The situation is only getting worse. The World Bank’s 2013 Bangladesh Development Update states that “weak internal controls, poor corporate governance, and slackening of credit standards resulted in irregularities in loan approvals,” which caused state-run commercial banks to classify more than half a billion dollars’ worth of loans as “nonperforming.” In the past six years, the four major state-run banks have seen sharp spikes in defaulted loans; the total amount of credit in default held by these four banks is about $2.45 billion (not including nearly $2 billion already written off).
This means that an enormous amount of capital is taken out of the banking system, and banks must compensate for this loss by keeping interest rates high. Currently, Bangladeshi banks’ interest rates range between about 9 percent and 16 percent, while deposits earn between 6 percent and 12 percent.
There is much talk about the government’s attempting to crack down on defaults. The new chairman of Basic Bank, one of the worst culprits with outstanding loans of over $1.45 billion, has publicly named and shamed a list of the top 100 loan defaulters. The bank has attempted to recover some of the bad debt, but has thus far been largely unsuccessful. Ultimately, there appears to be little legal recourse because the justice system is overwhelmed: There are more than 800,000 cases against loan defaulters pending in the courts.
The only way to alter this broken system is for the state-run banks to come under the control of a single body that is entirely separate from the executive branch of government. Having a set of banks that are controlled by political appointees, which report directly to the Finance Ministry and run no risk of being audited by impartial agencies, will always result in a corrupt system.
When the rather terrifyingly named Rapid Action Battalion recovered the money that the Munshi brothers had stolen from Sonali Bank, about 20 million taka was missing. Yusuf Munshi claimed to have spent the money buying a truckload of rice for a local religious leader. That money was never found.
Since the Munshis’ heist, the Bangladesh Bank has suggested that banks beef up their security, and yes, it sounds as though their vaults could use some more cement. But while we can barricade bank branches themselves, we need to step up efforts to stop those who steal from within, the sharp-suited businessmen who raid our banks in broad daylight.
First published in International Herald Tribune, October 10, 2014
Tahmima Anam, a writer and anthropologist, is the author of the novel “A Golden Age.”