Govt to hire 9 int’l law firms to recover defaulted loan funds from abroad

The government has initiated a process to engage international organisations to help recover defaulted loan funds allegedly siphoned abroad through irregularities and corruption in the banking sector.

As part of the initiative, non-disclosure agreements (NDAs) have been signed with nine international law firms, which are being appointed on a "no win, no fee" basis to assist in recovering defaulted loans from around 30 affected banks.

The process has initially been launched in six cases involving former land minister Saifuzzaman Chowdhury and business groups linked to Beximco, Sikder, Nasa and Orion.

Finance Minister Amir Khosru Mahmud Chowdhury disclosed the initiative in parliament on Wednesday (24 June) while responding to a question from lawmaker Anwarul Islam of Kurigram-1.

He said, “The international law firms will provide legal assistance to banks in identifying and repatriating funds and assets held abroad by alleged loan defaulters. The government plans to expand the programme further in the future.”

Replying to another question from Netrokona-5 lawmaker Masum Mostafa, the finance minister said illegally acquired money is usually transferred abroad through highly confidential and complex methods.

"As there is a lack of accurate, sufficient and acceptable information or reports both at home and abroad, it is extremely difficult to determine the actual amount of money that has been laundered from Bangladesh," he told parliament.

In his written question, Masum Mostafa sought information on the total amount of money allegedly laundered abroad during the previous regime, how much had been recovered and where the recovered funds were being utilised.

In response, the finance minister cited findings of the White Paper Preparation Committee formed by the interim government, which estimated that illicit financial outflows from Bangladesh between 2009 and 2023 totalled around $234 billion.

According to the estimate, the average annual outflow stood at about $16 billion, equivalent to roughly Tk1.8 lakh crore.

The minister said the estimated illicit outflows amounted to 3.4% of Bangladesh's GDP in FY2023-24, about one-fifth of the country's combined export earnings and remittance inflows, around 11.2% of national savings, and nearly twice the volume of net foreign aid and foreign direct investment inflows.