News media report highlighted the curse of illegal money transaction, popularly known as Hundi, crippling the country’s economic progress by accelerating capital flight, illegal money transaction by evading banking channel. Despite the central bank’s hard stance against Hundi, it cannot override the Hundi network as a vested quarter in league with law enforcers is doing the illegal business. Occasional arrest of Hundi traders and money recovered by law enforcement agencies in several border points and airports, are the tips of the total Hundi traders’ network across the country with franchises in several countries. Bangladesh Bank estimated that in the last 10 years more than Tk 4,00,000 crore was laundered to several destinations through Hundi while Washington-based Global Financial Integrity reported in 20042013, that Bangladesh lost over USD 13 billion through Hundi. Alarmingly, most of the over a million foreign nationals who work in the country send remittance through the illegal channel while remittance inflow through banking channel has become unattractive.
A total of 2370 Bangladeshis laundered money to Malaysia through the illegal channel to take the Second Home offer by Malaysia while the savings of Bangladeshi nationals in Swiss national Bank have increased to Tk 4428 crore in 2015 from 4068 in 2014. A United Nations study said over the last four decades Bangladesh lost about USD 800 million a year on average in capital flight driven by a balance of payment leakages, under invoicing, and unreported remittances. The total capital flight from Bangladesh accounts for 30.4 percent of its GDP. Another report said remittance inflow fell by $1.3 billion in the last 11 months this year compared to the same period last year due to transfer of money from abroad through Hundi. The central bank statistics show remittance inflow was $12.65 billion in January to November period this year, while it was $13.95 billion in the same period last year. Both the Finance Ministry and Bangladesh Bank have identified that Hundi is the major reason behind the slide.
It is known that a section of custom, police, bank and money exchange officials at Hazrat Shahjalal International Airport are involved with the illegal money laundering business. As the 16 scanners at the entrance and exit points of the airport cannot scan the paper currency, illegal trafficking of money becomes soothed. The traffickers take the advantage of scanner machines to do their business and prevention becomes impossible. A lion segment of the laundered money goes to gambling in casinos overseas while others are invested in the different business. The legal channel of money transfer is narrowing down and the illegal channel becomes bolstered. The government should go all-out efforts to defeat the Hundi network and popularize the legal money transfer system with no delay to save the economy.
A total of 2370 Bangladeshis laundered money to Malaysia through the illegal channel to take the Second Home offer by Malaysia while the savings of Bangladeshi nationals in Swiss national Bank have increased to Tk 4428 crore in 2015 from 4068 in 2014. A United Nations study said over the last four decades Bangladesh lost about USD 800 million a year on average in capital flight driven by a balance of payment leakages, under invoicing, and unreported remittances. The total capital flight from Bangladesh accounts for 30.4 percent of its GDP. Another report said remittance inflow fell by $1.3 billion in the last 11 months this year compared to the same period last year due to transfer of money from abroad through Hundi. The central bank statistics show remittance inflow was $12.65 billion in January to November period this year, while it was $13.95 billion in the same period last year. Both the Finance Ministry and Bangladesh Bank have identified that Hundi is the major reason behind the slide.
It is known that a section of custom, police, bank and money exchange officials at Hazrat Shahjalal International Airport are involved with the illegal money laundering business. As the 16 scanners at the entrance and exit points of the airport cannot scan the paper currency, illegal trafficking of money becomes soothed. The traffickers take the advantage of scanner machines to do their business and prevention becomes impossible. A lion segment of the laundered money goes to gambling in casinos overseas while others are invested in the different business. The legal channel of money transfer is narrowing down and the illegal channel becomes bolstered. The government should go all-out efforts to defeat the Hundi network and popularize the legal money transfer system with no delay to save the economy.
