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Govt should urgently regulate mobile banking to check money laundering

  • Nironjan Roy
  • 21st September, 2022 12:48:41 PM
  • Print news

Mobile banking services, especially those of bKash and Nagad, have reached its climax becoming ahead of formal banks in terms of transaction and cheap popularity. The unusual growth of mobile banking has coincided with rising risk.

Many a times, the government authorities were alerted to the ills of mobile banking and suggested to pull lead rope. The measures to   regulate the sector were also discussed but the Bangladesh Bank appears to be indifferent towards the issue.

Criminal Investigation Department (CID) of Police has scanned serious money laundering abusing mobile banking. CID got adequate evidence in this regard and arrested 16 persons in connection with the offence. As per CID statement, the arrestees were connected with a popular mobile banking company and they laundered Tk 75,000 crore ($7.8b) abroad through mobile banking. It is really alarming. The group sent the huge amount of money abroad exposing Bangladesh to economic loss amid dollar crisis.

Had the mobile banking organisations complied with the rules and regulations, the incident of money laundering would not have taken place. If Bangladesh had got the money, its foreign currency reserve would not decline beneath $45b. The magnitude of the money laundering is not confined to arrest of 16 people as more than 5,000 mobile banking agents are involved in hundi and laundering.

The horror of laundering of huge amount of money could not be comprehended well for lack of details. The reports of print and electronic media were superficial and based on statements of the CID. It was claimed that the three groups committed the crime were connected to mobile banking services. International money laundering and hundi were not possible without active support of officials and agents of mobile banking organisations. So, the number of such groups may be higher than three mentioned in the report.

Laundering syndicate usually comprises two groups, one deals with inbound money and the other outbound. The second group which sends money abroad with the support of mobile banking needs to be detected properly. We believe that CID will be able to identify all culprits and bring them to book.

Mere arrests of some people and hundi agents will not suffice to end such financial crimes. Mobile banking services are enjoying freedom to such an extent that money laundering will increase gradually. Currently, a person can open an account of mobile banking with only NID card and make transaction of thousands of taka per day.

Such unregulated money transaction cannot be imagined in the developed or developing countries, except Bangladesh. Cheap things are always popular in our country and used for corruptions and crimes. The mobile banking services have to be controlled to check laundering and hundi. If mobile banking cannot be regulated properly, it will give birth to many other crimes than laundering.

The current era has been a boom in use of technology in all services. So, online banking is the demand of the day. Unfortunately, the banks of our country have miserably failed to promote online services. So, people are to rely on mobile banking companies like bKash and Nagad. If the banks had strengthened such online services, people would have felt secure in making transaction and laundering would be checked.

Despite all criticisms, banks are the most trusted means of financial transaction. The banks discharge function under tough rules and regulations set by the Bangladesh Bank. Besides, the banks have to follow various local and international laws. Although digital Bangladesh is our national slogan, the banks are lagging behind as regard to online services.

Against the backdrop, the mobile banking companies have got a walkover. Contribution of mobile banking to the easy financial transaction for individuals and business houses are undeniable. So, it is not easy and wise to stop such services. Although it is hard to regulate the mobile services, there is no alternative to pulling the lead rope.

The government authorities should restrict the functions of the mobile banking to two services, allowing people to pay various bills directly without bank accounts, and sending money with bank accounts.

For transferring money, the mobile banking service-seekers must have their bank accounts linked to bKash or Nagad accounts.  While making transactions, the computer system will verify their bank accounts. If accountholders want to ensure privacy, they can restrict information to the reasonable level.

The writer is a certified anti-money laundering specialist and banker, Toronto, Canada.

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(Translated by Firoz Al Mamun)