Banking system | The Daily Star
11:00 PM, October 20, 2009 / LAST MODIFIED: 11:00 PM, October 20, 2009

Banking system

I would like to thank The Daily Star and its journalist Mr. Imran Hossain for his news report that was published to draw the attention of the policymakers and citizens in The Daily Star on 12 October 2009 under the heading -- Anti-graft probes stumble on banks.
Bangladesh's banking system, already influenced by the global financial crisis, is facing fresh turmoil. Fighting terrorism, economic offences and poverty reduction will be the three top priorities of the present government in the years to come. The government will have top three core functions fighting terrorism, economic and poverty reduction in the next ten years with emphasis on dealing with economic crimes, mainly banking and security-related frauds. The economy is progressing and globalisation is increasing, economic crimes are on the rise across the country and Bangladesh Bank being a central agency needs a specialised unit to tackle them. We must have a special Banking and Securities unit to check crimes related to share market and banking sector.
In Bangladesh, however, the dividing line between politics and economics is not always easy to identify, and many observers believe that political motivations may be playing a part in the bank bailouts. The election of a new government in Bangladesh in 2008 provided fresh impetus to the development of the offshore services sector. A spate of seven offshore industry measures should be added to the statute book. These include--
The International Financial Services Commission Act which seeks to promote, protect and enhance Bangladesh as an international financial services centre and to regulate the provision of international financial services. The International Insurance Act which provides for the regulation of persons establishing and carrying on international insurance business.
The Protected Cell Companies Act which allows for the incorporation of protected cell companies or the conversion of an existing company to a protected cell company.
The Mutual Funds Act which provides for the regulation, authorisation and control of mutual funds and their managers and administrators. The Limited Liability Partnerships Act which permits the creation of limited liability partnerships. The Retired Persons (Incentives) Act which offers certain tax exemptions and incentives to qualified retired persons. The International Business Companies (Amendment) Act which provides for the establishment of limited life companies.
While developing its offshore sector, Bangladesh has not overlooked the fact that the offshore vehicles may be used by unscrupulous elements to launder the proceeds of human or drug trafficking or other illicit activities. Simultaneously with the enactment of the Offshore Banking Act, Bangladesh also passed the Money Laundering (Prevention) Act which established mechanisms and procedures to ensure that the country's financial institutions are not used to disguise the source of illicit funds. This Act is central to the country's strategy to develop a reputable and viable offshore services sector. The definition of 'money laundering' is extremely wide and covers 'engaging, directly or indirectly, in a transaction that involves wealth that is the proceeds of crime, disguising, disposing of or bringing into Bangladesh anything that is the proceeds of crime, knowing or having reasonable evidence for believing the same to be the proceeds of crime.

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