The central bank of Bangladesh asked the commercial banks to take necessary measures for preventing trade-based money laundering by mitigating the risk of fraud and forgeries in the country's banking sector, officials said.
The instruction came at a meeting of the chief anti-money laundering compliance officers of all 47 scheduled banks at the Bangladesh Bank (BB) Monday with BB Deputy Governor Abu Hena Mohammad Razee Hassan in the chair.
The BB has taken the latest measure against the backdrop of increasing large-scale trade-based irregularities in purchasing and providing acceptance of bills against foreign currency-denominated local LCs (letters of credit) by different bank branches in the recent months.
"We've asked the banks to improve efficiency of the officials, who are responsible for complying with the Money Laundering Prevention Act-2012 through providing training," a BB senior official told the FE Tuesday.
He also said the banks would have to be cautious about any possible trade-based money laundering because most of money might be laundered through foreign trade.
"The trade-based money laundering has been included as a predicate offence in the existing Money Laundering Prevention Act," the central banker said, adding that trade-based money laundering means smuggling in or out money or property earned legally or illegally.
Eleven new predicate offences including smuggling and offences related to customs and excise duties, tax-related offences, terrorism or financing in terror activities have been added to the Money Laundering Prevention Act-12.
Predicate offence means the offences, by committing which within or outside the country, the money or property derived is laundered or an attempt is made to launder it.
The number of predicate offences rose to 28 from 17 earlier, according to the BB officials.
The meeting also discussed different issues including the Know Your Customer (KYC) and reporting on suspicious transactions and cash transaction.
"We've asked the banks to inform the Bangladesh Financial Intelligence Unit (BFIU) of the central bank instantly, if they detect any suspicious transaction," another BB official said.
The central bank is empowered to fine the banks and non-banking financial institutions (NBFIs) Tk 50,000 to 2.5 million, instead of the previous range of Tk 10,000 to 0.5 million, for their failure in submitting reports related to money laundering, according to the provision of the Money Laundering Prevention Act 2012.
The commercial banks have been asked to continue submitting suspicious transaction reports (STR) besides cash transaction reports (CTR), as the two reports are completely different, the BB officials added.
Under an existing provision, the banks will have to submit CTR on both withdrawal and deposit by the third week of next month.
The commercial banks have to report if an amount of Tk 1.0 million or above is deposited or withdrawn in cash from a particular account.