BB Detects More Suspicious Transaction

Central bank detects transaction suspicious
Not all indicate act malicious.
Growth of mobile financial service
Hardly brings offer for local ICT office.

Bangladesh Financial Intelligence Unit(BFIU) of Bangladesh Bank in its annual report claims that it has detected 5280 suspicious transactions in 2020-21. In 2018-19,suspicious transactions were 3675. BFIU notes that the growth in suspicious transactions is mostly due to fraudulent and multilevel marketing activities of e-commerce platforms. Banks have reported 4495 suspicious transactions during this period,financial institutions and exchange houses have reported the rest. However, head of BFIU underscores that reporting of suspicious transactions does not indicate rise in clandestine transactions or criminal activity; rather it indicates increase in awareness about reporting the incident of suspicious transaction¹.

Generally, e-commerce platforms do their transactions online and through mobile financial services, which have registered commendable growth in the last one decade. But every mobile financial operator has to maintain unique bank account,known as trust and settlement account whose role is to convert digital money into actual money,against every mobile financial account opened as per the mobile financial services guidelines laid out by Bangladesh Bank.Despite having 51% share of Nagad, Department of Posts did not own the trust and settlement accounts. Those were owned by 49% share holder of Nagad,Third Wave Technologies Limited². This information was brought to surface when Third Wave Technologies Limited had tried to change the ownership of the settlement accounts of Nagad in a bid to avoid paying the clients in the wake of a scam. The objective was to put responsibility of clearing client’s money on the other owner's shoulder,here Department of Posts. As the news became public, Bangladesh Bank intervened and required that Nagad abstain from opening new account without prior consent of Bangladesh Bank and Department of Posts.³

Banks are obliged to report about transactions over TK 1 million. In addition, they can also report on transactions that they deem malevolent. During pandemic, when most of the economic activities were stalled and transportation with the rest of the world was disrupted, meteoric growth of e-commerce platforms raised suspicion. Many feared the platforms were used to legalize black money and launder money abroad. Regulatory environment was weak back then.This kind of transactions was reflected in the mobile financial service provider's bank account. BFIU back then froze many accounts sensing illegal MLM activities. Many used Nagad ,offering lucrative rates,to run their e-wallets to do e-commerce transactions. It is not known what percentage of suspicious transaction belongs to Nagad subscribers. Since row revolved round eValy,e-orange and clients mostly drawn from Nagad, Nagad subscribers may constitute a large part of the accounts fell under suspicious category.

Nevertheless, this should not be the pretense to clip the wings of mobile financial services, which did a tremendous job in financial inclusion. The services are now diversifying its product range. Now many can open savings account using such services.Mobile financial service operators should concentrate on procuring local software. This is no rocket science that our local software developers will not be able to develop. Many brokerage houses in Bangladesh use local software. Mobile financial service operators may follow their steps.

The head of BFIU anticipates correctly that suspicious transactions may grow in future and it is wrong to categorize every suspicious transaction as criminal offense. This observation came at a moment when government continues legalizing black money in ICT sector in the current budget⁴[*]. So apart from e-commerce,many startups may pop up to avail this opportunity. Government has to make sure that this kind of capital turns out to be productive and catalyst for the industry instead of just relabeling the money,which does little help for the industry in terms of job creation, innovation and adding values. While the number of suspicious transaction goes up, central bank should take the onus to spell clearly which one is an act of malevolence and which one passes the scrutiny.

Notes And References:
1 “Suspicious Transaction Reporting Up By 43.67%,BFIU ”,Shamprotik Deshkal, March 15,2022. For more read at https://en.shampratikdeshkal.com/economy/news/220327725/suspicious-transaction-reporting-up-by-bfiu

2 “What Does Nagad Ownership Row Reveal?”,Rezaul Hoque, https:hoquestake.blogspot.com,September 12,2021.For more read at https://hoquestake.blogspot.com/2021/09/what-does-nagad-ownership-row-reveal.html?m=1

3 “BB Bars Renaming Bank Accounts Of Nagad Without Its Approval”,New Age,September 06,2021. For more read at https://www.newagebd.net/article/148399/bb-bars-renaming-bank-accounts-of-nagad-without-its-approval

4 "Bangladesh Retains Option To Legalise Dirty Money By Raising Fines", bdnews24.com,June 29,2021. For more read at https://m.bdnews24.com/en/detail/economy/1908159

[Note:This piece has been updated on March 22,2022 at 11:04 AM Bangladesh Standard Time (BST).
*The update includes reference to legalizing dirty money in ICT sector.]

What Does Nagad Ownership Row Reveal?

Row inside a public company
Reveals corruption of many.
Flaunting image of public property
Many made a fortune hefty.

Recently, a debate over the ownership of a leading Mobile Financial Service(MFS) operator has come to fore. Nagad has increasingly offered attractive rates through intensive promotional campaign since it began its journey in March 26,2019. It has been widely presented as a public-private venture between Department of Posts and a private firm. But a row between stakeholders divulged that Department of Posts did not consolidate fully its grip on Nagad. Despite having 51% ownership of Nagad,account that MFS maintains to convert digital money into actual money,known as trust cum settlement account, in commercial banks belongs to 49% owner of the company,Third Wave Technologies.

Recently, Third Wave Technologies changed the ownership of trust cum settlement accounts to the name of Nagad Limited.¹

As the row became public, Bangladesh Bank intervened and said from now onwards without consent of Bangladesh Bank and Department of Posts no new account would be allowed in Nagad.

Even the director general of the Department of Posts in a video message claimed that it awaited government’s nod to consolidate Bangladesh Post Office's ownership in the company.²

Recently, another e-Commerce company went into bankruptcy after the owners have embezzled Tk 1.1 billion. Many vendors and customers complained about their dues to the authority. When some of them had get back money or refund,Bangladesh Bank froze their Nagad account for indefinite period for verification and citing suspicious transaction. That was when this ownership debate popped up.

Despite being the majority owner of the company, Department of Posts cannot establish its control of the operations of the company. It is important to note that ownership of Nagad is based on a revenue sharing model.

Earlier another controversy of Nagad had come to fore when a foreign-based news site had revealed the owners of Nagad during its heyday. The names included staffs of Prime Minister’s office and influential ruling party leaders. Long before the news broke out,they all sold their shares sensing gravity of such revelation.

It is indeed a puzzling matter how part of a public service company is being used by others for their profit motive without giving the majority share owner its just dues.

It is not the first time that resources of a public company is used by a private one. A leading telephone operator took lease of Bangladesh Railway’s unused optical fiber network.

But this time controversy arose over ownership of this joint venture. There is no doubt that through the sale of shares previous share holders of Nagad gained a lot. Flaunting image of Bangladesh Post Office, they manipulated people’s trust.

As per Bangladesh Bank,there are 15 banks who are operating Mobile Financial Services in the country. Number of active users reached 4.09 crore at the end of June,2021. Average daily transaction rose to Tk 2,099.80 crore in June,2021. This signifies how important the MFS has become in vernacular lives of Bangladeshis.

Some mobile operators ,as many alleged, led their clients to subscribe Nagad services. Some denied it saying they had sought client’s consent through SMS.³

This thing has not become an issue unless some e-commerce platforms went into bankruptcy. Latest addition is the dhamaka which laundered Tk 116 crore abroad.Earlier,eorange had swindled Tk 1.1 billion and eValy had failed to meet merchant plus client’s obligations of Tk 411 crore. Many MFS companies,including Nagad, fell victim to deceiving acts and halted transactions of many accounts which failed to comply Bangladesh Bank regulations of suspicious transaction.

At this time Nagad ownership row surfaced on the media. It is a shame that many use public projects and company to make personal gains. In the name of self-financing the Padma bridge project, we witnessed how project cost has swelled over the years and a small group of people and government bodies pocketed huge amount of taxpayer’s money bypassing all alleys of accountability. Nagad ownership row is the latest addition to ongoing misuse of public company.

Notes And References:

1 “BB Bars Renaming Bank Accounts Of Nagad Without Its Approval”,New Age,September 06,2021Link here

2 “Nagad To Reopen Account After Transaction Scrutiny “,DS Sourav,Saddam Hossein,Meraj Mavis,Business Standard,September 08,2021 Link here

3 “Nagad,Robin Sign Deal On Financial Inclusion”,New Age,January 20,2021Link here

La Semaine Dernière A Mes Yeux

 (24 mai --- 31 mai)

Selon un reportage, la Banque centrale a alerté toutes les banques  à portable au propos de virement clandestin  depuis l’étranger à la veille de la fête religieuse.  Dans le mois de jeûne, les migrants bangladais virent d’argent depuis l’étranger sur les comptes de leurs proches. De plus en plus de Bangladais préfèrent les banques à portable  puisque ça fait moins de temps. Il se peut qu’ils fassent des virements  clandestins . Donc, le renseignement de Bangladesh Bank a demandé aux banques à portable d’identifier les comptes quit font virement clandestin.

Selon un reportage, American Apparel And Footwear Association dans un communiqué a conseillé à Premier Ministre bangladais de retirer les plaintes contre les dirigeants d’ouvrier de la confection et de recruter encore les ouvriers licenciés pour avoir participé dans la protestation en janvier cette année.

Selon un reportage, une nouvelle organization des droits de l’homme s’est dit que les forces de sécurité avaient extrajudiciarement tué 118 personnes de janvier à avril. Pendant la période 354 femmes et 234 enfants ont été violés.

Selon un reportage, police dans son enquête n’a pas trouvé que le conseiller de Teknaf et dirigeant du parti en exercice  était  tué par les feux croisés entre deux bandes de trafiquants de drogue. RAB dans sa plainte s’est dit qu’il était pris entre deux feux par les trafiquants.

Selon un reportage, Daech a revendiqué une tentative d’attaque contre une camionette de Police à Malibagh. Dimanche soir, Daech  a fait exploser une bombe dans une camionette qui appartient à renseinement policier, blessant un agent de Police. 

Selon un reportage, police a préparé procès-verbal contre 16 culpables pour avoir participé à la tuerie d’une étudiante de l’école religieuse.

Selon un reportage, le renseignement policier a accusé 125 personnes dont des dirigeants de la filiale du parti en exercice pour avoir distribué les questions pour argent à la veille des examens publics.

Selon un reportage, une organization des droits de l’homme a demandé explication pour les morts mystérieuses de deux personnes dans la prison. Le mecredi un tueur a été tué par un autre détenu qui y avait envoyé six heurs avant. A la fin d’Avril, un avocet a été succombé à ses brûlures après des gens lui ont mis à feu dans la prison de Panchagarh.