Remittance: Tk 25,000cr lost to hundi in last four months

At least 5,000 agents of different mobile financial services made suspicious transactions involving around Tk 25,000 crore, meant to be remitted by Bangladeshi expatriates, in the last four months.

The money was channelled through hundi, a cross-border money transfer method that bypasses the legal banking system.

Hundi traders have been luring Bangladeshi migrants into using the illegal channel to send home money. They use local MFS agents to pay the migrants' relatives or designated persons here in taka against any amount of foreign currency that the migrants want to send home, according to the Criminal Investigation Department of police.

In so doing, the agents deprived the country of around Tk 25,000 crore in remittance in the past four months, ultimately hitting the country's foreign currency reserves, CID chief Mohammad Ali Mia told journalists at the CID office yesterday.

Analysing the trends, the CID estimated that Bangladesh may have lost around $7.8 billion (around Tk 75,000 crore) in remittance in the last one year.

The CID's findings, however, give only a partial picture, as they don't provide detailed data on transactions made through hundi abroad.

CID officials said they launched the probe after the country's forex market became volatile following the rapid appreciation of the US dollar against the taka in May.

Bangladeshi migrant workers and professionals working in different companies and universities were among those who sent home money through hundi, they said adding that this came to light after the arrest of 12 MFS agents and four hundi traders.

The bulk of the amount was collected by hundi traders in Dubai and Saudi Arabia, and the rest in Italy, Singapore, Malaysia and Kuwait, a CID high official told The Daily Star yesterday.

CID officials said these hundi gangs operate split intothree groups. The first group collects foreign currency from expatriates abroad while the second group pays the amount to MFS agents in the local currency. The third group is comprised of MFS agents who transfer the money to the relatives or persons designated by the expatriates.

The 16 arrestees made suspicious transactions involving Tk 20.70 crore in the last four months. The CID arrested 11 of them from different parts in Chattogram and the rest in Dhaka.

The CID also seized 34 mobile phones, 33 SIM cards and Tk 10.46 lakh in cash from the arrestees. Four of the SIM cards were linked to agent accounts that had deposits of Tk 3.46 crore.

With the help of MFS agents, hundi traders are also carrying out illegal businesses such as online gambling, drug trafficking, gold smuggling and yaba trade, the CID chief mentioned.

About the role of MFS companies, he said Bangladesh Bank will look into it. The arrestees are agents. The MFS companies should increase vigilance.

The CID has so far filed three money laundering cases against 45 people with Kotwali Police Station in Chattogram, and Khilgaon and Mohammadpur police stations in Dhaka.

It also identified six Bangladeshi hundi traders in Saudi Arabia, who collected money from migrant workers and asked their counterparts in Bangladesh to send the money to the workers' relatives with the help of MFS agents.

Investigators said the majority of these MFS agents are from Chattogram, Brahmanbaria, Cumilla, Kushtia, Khulna and Bagerhat.

Most of the hundi transactions (27 percent of around Tk 25,000 crore) were made in Chattogram region, said one of the investigators.

According to the statement of the case filed with Kotwali Police Station, the investigators found suspicious transactions from the agent account of "Joy Computer" owned by Rupon Kanti Das Joy. In four months since April, 7,825 transactions involving Tk 6.06 crore were made from this account to different MFS accounts, mostly belonging to migrants' relatives.

In another case filed with Khilgaon Police Station, the investigators said Tk 11.97 crore was sent to expatriate's relatives from three merchant accounts through MFS in three months.

Many of these 5,000 agents are involved in hundi trade, online gambling, and cryptocurrency trade, said the CID official, adding that most of the online gambling sites are controlled from Russia.

A BB source said Bangladesh Financial Intelligence Unit (BFIU) provided the list of 5,000 agents to the CID following suspicious transactions.

The transactions were made from these accounts between 12:00am and 6:00am though the peak time for MFS transactions is between 6:00pm and 8:00pm. Each of these accounts made four transactions per minute between 12:00am and 6:00am, which is very unusual, the source added.

Asked about the beneficiaries of the hundi trade, a top CID official said a section of Bangladeshi businessmen abroad buys the foreign currency from hundi traders.

"Other buyers include people who are looking to purchase property or receive treatment abroad," added the official, seeking anonymity.

"Hundi traders have connections with migrant workers. They collect money from migrants at the latter's convenience and immediately arrange its transfer to their relatives," the official said.

The official suggested that the money transfer system be made more efficient so that remitters can transfer money to their relatives within the shortest possible time. 

Sources involved in the banking sector say many expatriates prefer hundi for sending home money as hundi traders offer exchange rates higher than the official one.

Referring to the list of 5,000 agents, Kamrul Ahsan, additional deputy inspector general of the CID, said more names may come up after further investigation.

"We have just started our probe… We will continue our drive to arrest those involved in hundi and other such illegal trades," he told this newspaper.