Enact law to shield pvt banks from scams

Amid the latest scandal in the country's banking sector, Transparency International Bangladesh yesterday called upon the government to formulate a "beneficial ownership transparency act" to protect private banks from pitfalls.

It also urged the government to join the global financial platform, Common Reporting Standard, to ensure better monitoring and transparency in the banking sector.

In a statement, the graft watchdog said recent incidents of embezzling several thousand crores of taka from at least three private banks through false documents in the name of non-existent companies have pushed the country's banking sector to the verge of a collapse.

It added that the sector was already riddled with incidents of massive loan defaults and money laundering.

TIB believes the "whimsical decisions to change top positions in banks underpolitical consideration" has predominantly created a favourable condition for embezzlement.

Terming the latest incident of embezzlement "alarming", Iftekharuzzaman, TIB executive director, said in the past 14 years the amount of defaulted loans has increased to six times more than before.

The recent loans were granted "unusually swiftly" at a time when banks have been unable to recover bad loans despite efforts by changing its definition and through rescheduling, he said.

"Who are the real beneficiaries of these huge amounts of money? The countrymen have the right to know …"

Iftekharuzzaman called on the government to take prompt measures to ensure that embezzled money could not be laundered abroad.

He also urged the government to probe  the embezzlement incidents with utmost importance.

Citing the Global Financial Integrity's latest statistics, he said in the name of trade, an average of $8,270 million is laundered from Bangladesh every year.

He added that instead of taking action to prevent money laundering, the government made an attempt to stop providing relevant data to the UN agency so that such reports are not published.