Chapter 1: Basics of Money Laundering and Terrorist Financing 1.1 Introduction For most countries money laundering and terrorist financing raise significant issues with regard o prevention, detection and prosecution. Sophisticated techniques used to launder money and finance terrorism add to the complexity of these issues. Such sophisticated techniques for money laundering may involve: multiple financial transactions, the use of different financial instruments and other kinds of value-storing assets; different types of financial institutions, accountants, financial advisers, shell corporations and other service providers like remittance service; complex web of transfers to, through, and from different countries. On the other hand, terrorism financing involves intention to provide assets or assist in some way to do terrorist acts. A less simple concept, however, is defining terrorism itself, because the term may have significant political, religious, and national implications that may vary from country to country. Money laundering and terrorist financing often display similar transactional features, mostly having to do with concealment and disguise. Money launderers send or try to send illicit funds through legal channels in order to conceal their criminal origins, while those who finance terrorism transfer funds that may be legal or illicit in origin in such a way as to conceal their source and ultimate use. But the result is the same—reward. When money is laundered, criminals profit from their actions; they are rewarded by concealing the criminal act that generates the illicit proceeds and by disguising the origins of what appear to be legitimate proceeds. Similarly, those who finance terrorism are rewarded by concealing the origins of their funding and disguising the financial support to carry out their terrorist stratagems and attacks. 1.2 What is Money Laundering? Money laundering can be defined in a number of ways. But the fundamental concept of Money laundering is the process by which proceeds from a criminal activity are disguised to conceal their illicit origins. Most countries subscribe to the definition adopted by the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988) (the Vienna Convention) and the United Nations Convention Against Transnational Organized Crime (2000) (the Palermo Convention):  The conversion or transfer of property, knowing that such property is derived from any offense, e.g. drug trafficking, or offenses or from an act of participation in such offense or offenses, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an offense or offenses to evade the legal consequences of his actions;  The concealing or disguising of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from an offense or offenses or from an act of participation in such an offense or offenses, and;  The acquisition, possession or use of property, knowing at the time of receipt that such property was derived from an offense or offenses or from an act of participation in such offense or offenses. The Financial Action Task Force on Money Laundering (FATF), which is recognized as the international standard setter for anti-money laundering (AML) efforts, defines the term “money laundering” succinctly as “the processing of criminal proceeds to disguise their illegal origin in order to legitimize the ill-gotten gains of crime.” Money Laundering is defined in Section 2 (k) of the Money Laundering Prevention Act, 2009 as follows: Money Laundering means: i) transfer, convert, bringing/remitting funds in and out of Bangladesh the money or properties acquired through commission of any predicate offence1 with an intention to concealing or disguising the illicit origin of the property or smuggle fund or property earned through legal or illegal means to abroad; ii) conduct, or attempt to conduct a financial transaction with an intent to avoid a reporting requirement under this Act (the MLPA, 2009). iii) to do or attempt to do such activities so that the illegitimate source of the fund or property may be concealed or disguised or knowingly assist to perform or conspire to perform such activities. ÒgvwbjÛvwisÓ A_􀁿© (A) wbgoeewY©Z D‡Ï‡k¨ Aciv‡ai mv‡_ m¤ú„³ m¤úwË ÁvZmv‡i ¯’vbvšÍi ev iƒcvšÍi ev n¯ÍvšÍi t (1) Aciv‡ai Av‡qi A‰ea cÖK…wZ, Drm, Ae¯’vb, gvwjKvbv I wbqš¿Y †Mvcb ev QÙve„Ë Kiv; A_ev (2) m¤ú„³ Aciva msNU‡b RwoZ †Kvb e¨w³‡K AvBbMZ e¨e¯’v MÖnY nB‡Z iÿvi D‡Ï‡k¨ mnvqZv Kiv; (Av) ‰ea ev A‰ea Dcv‡q AwR©Z A_© ev m¤úwË wbqg ewnf~©Zfv‡e we‡`‡k cvPvi Kiv; (B) ÁvZmv‡i Acivajä Av‡qi A‰ea Drm †Mvcb ev Avovj Kwievi D‡Ï‡k¨ Dnvi n¯ÍvšÍi, we‡`‡k †cÖiY ev we‡`k nB‡Z evsjv‡`‡k †cÖiY ev Avbqb Kiv; (C) †Kvb Avw_©K †jb‡`b GBiƒcfv‡e m¤úboe Kiv ev m¤úboe Kwievi †Póv Kiv hvnv‡Z GB AvB‡bi Aaxb Dnv wi‡cvU© Kwievi cÖ‡qvRb nB‡e bv; (D) m¤ú„³ Aciva msNU‡b cÖ‡ivwPZ Kiv ev mnvqZv Kwievi AwfcÖvq †Kvb ˆea ev A‰ea m¤úwËi iƒcvšÍi ev ¯’vbvšÍi ev n¯ÍvšÍi Kiv; (E) m¤ú„³ Aciva nB‡Z AwR©Z Rvbv m‡Ë¡I GB ai‡bi m¤úwË MÖnY, `L‡j †bIqv ev †fvM Kiv; (F) GBiƒc †Kvb Kvh© Kiv hvnvi Øviv Acivajä Av‡qi A‰ea Drm †Mvcb ev Avovj Kiv nq; (G) Dc‡i ewY©Z †h †Kvb Aciva msNU‡b AskMÖnY, m¤ú„³ _vKv, Aciva msNU‡b lohš¿ Kiv, msNU‡bi cÖ‡Póv A_ev mnvqZv Kiv, cÖ‡ivwPZ Kiv ev civgk© cÖ`vb Kiv; (e) Òwi‡cvU© cÖ`vbKvix ms¯’vÓ A_©- (A) e¨vsK; (Av) Avw_©K cÖwZôvb; (B) exgvKvix; (C) gvwb †PÄvi; (D) A_© A_ev A_©g~j¨ †cÖiYKvix ev ¯’vbvšÍiKvix †h †Kvb †Kv¤úvbx ev cÖwZôvb; (E) evsjv‡`k e¨vs‡Ki AbygwZμ‡g e¨emv cwiPvjbvKvix Ab¨ †Kvb cÖwZôvb; (F) (1) ÷K wWjvi I ÷K †eªvKvi, (2) †cvU©‡dvwjI g¨v‡bRvi I gv‡P©›U e¨vsKvi, (3) wmwKDwiwU Kv÷wWqvb, (4) m¤ú` e¨e¯’vcK, (G) (1) AjvfRbK ms¯’v/cÖwZôvb (Non Profit Organisation); (2) †emiKvix Dboeqb ms¯’v (Non Government Organisation); (3) mgevq mwgwZ; (H) wi‡qj G‡÷U †W‡fjcvi; (I) g~j¨evb avZz ev cv_‡ii e¨emv cÖwZôvb; (J) Uªv÷ I †Kv¤úvbx †mev cÖ`vbKvix; (AA) AvBbRxex, †bvUvix, Ab¨vb¨ AvBb †ckvRxex Ges GKvD‡›U›U; (AAv) miKv‡ii Aby‡gv`bμ‡g evsjv‡`k e¨vsK KZ…©K, mg‡q mg‡q, weÁwß Rvixi gva¨‡g †NvwlZ Ab¨ †Kvb cÖwZôvb; (k) Òm¤ú„³ Aciva (Predicate offence)Ó A_© wb‡goe DwjøwLZ Aciva, hvnv †`‡k ev †`‡ki evwn‡i msNU‡bi gva¨‡g AwR©Z †Kvb A_© ev m¤ú` jÛvwis Kiv ev Kwievi †Póv Kiv, h_v t (1) `ybx©wZ I Nyl; (2) gy`ªv RvjKiY; (3) `wjj `¯Ív‡eR RvjKiY; (4) Puv`vevwR; (5) cÖZviYv; (6) RvwjqvwZ; (7) A‰ea A‡¯¿i e¨emv; (8) A‰ea gv`K I †bkv RvZxq `ª‡e¨i e¨emv; (9) †PvivB I Ab¨vb¨ `ª‡e¨i A‰ea e¨emv; (10) AcniY, A‰eafv‡e AvUKvBqv ivLv I cYe›`x Kiv; (11) Lyb, gvivZ¥K kvixwiK ÿwZ; (12) bvix I wkï cvPvi; (13) †PvivKvievi; (14) †`kx I we‡`kx gy`ªv cvPvi; (15) Pzwi ev WvKvwZ ev `my¨Zv ev Rj`my¨Zv ev wegvb `my¨Zv; (16) Av`g cvPvi; (17) †hŠZzK; (18) †PvivPvjvbx I ïé msμvšI Aciva; (19) Ki msμvšI Aciva; (20) †gav¯^Z¡ jsNb; (21) mš¿vm I mš¿vmx Kv‡h© A_© †hvMvb; (22) †fRvj ev ¯^Z¡ jsNb K‡i cY¨ Drcv`b; (23) cwi‡ekMZ Aciva; (24) †hŠb wbcxob (Sexual Exploitation); (25) cuywR evRvi m¤úwK©Z g~j¨ ms‡e`bkxj Z_¨ Rbm¤§y‡L cÖKvwkZ nIqvi c~‡e© Zvnv Kv‡R jvMvBqv †kqvi †jb‡`‡bi gva¨‡g evRvi myweav MÖnY I e¨w³MZ ev cÖvwZôvwbK myweavi j‡ÿ¨ evRvi wbqš¿‡Yi †Póv Kiv (Insider Trading &Market Manipulation); (26) msNe× Aciva (Organised Crime) ev msNe× Acivax `‡j AskMÖnY; (27) fxwZ cÖ`k©‡bi gva¨‡g A_© Av`vq; Ges (28) GB Aa¨v‡`‡ki D‡Ïk¨ c~iYK‡í evsjv‡`k e¨vsK KZ„K© miKv‡ii Aby‡gv`bμ‡g †M‡R‡U cÖÁvc‡bi gva¨‡g †NvwlZ Ab¨ †h †Kvb m¤ú„³ Aciva; 4| gvwbjÛvwis Aciva I `Ð|(1) GB Aa¨v‡`‡ki D‡Ïk¨ c~iYK‡í, gvwbjÛvwis GKwU Aciva ewjqv MY¨ nB‡e| (2) †Kvb e¨w³ gvwbìvwis Aciva Kwi‡j ev gvwbìvwis Aciva msNU‡bi †Póv, mnvqZv ev lohš¿ Kwi‡j wZwb Ab~¨b 4 (Pvi) ermi Ges AbwaK 12 (evi) ermi ch©šÍ Kviv`‡Ð `wÐZ nB‡eb Ges Bnvi AwZwi³ Aciv‡ai mv‡_ mswkøó m¤úwËi wظY g~‡j¨i mgcwigvY ev 10 (`k) jÿ UvKv ch©šÍ, hvnv AwaK, A_©`‡Ð `wÐZ nB‡eb| (3) Av`vjZ †Kvb A_©`Ð ev `‡Ði AwZwi³ wnmv‡e `wÐZ e¨w³i m¤úwË iv‡óªi AbyK~‡j ev‡Rqvß Kwievi Av‡`k cÖ`vb Kwi‡Z cvwi‡e hvnv cÖZ¨ÿ ev c‡ivÿfv‡e gvwbjÛvwis ev †Kvb m¯ú„³ Aciv‡ai mv‡_ m¤ú„³ ev mswkøó| (4) GB avivi Aaxb †Kvb mËv gvwbjÛvwis Aciva Kwi‡j mswkøó m¤úwËi g~‡j¨i Ab~¨b wظY A_ev 20 (wek) jÿ UvKv, hvnv AwaK nq, Rwigvbv Kiv hvB‡e Ges D³ cÖwZôv‡bi wbeÜb evwZj‡hvM¨ nB‡e| (5) m¤ú„³ Aciv‡a Awfhy³ ev `wÐZ nIqv gvwbjÛvwis Gi Kvi‡Y Awfhy³ ev `Ð cÖ`v‡bi c~e©kZ© nB‡e bv| 5| Aeiæ×KiY ev †μvK Av‡`k jsN‡bi `Ð|􀁿 †Kvb e¨w³ GB Aa¨v‡`‡ki Aaxb †Kvb Aeiæ×KiY ev †μvK Av‡`k jsNb Kwi‡j wZwb AbwaK 3 (wZb) ermi ch©šÍ Kviv`Ð ev Aeiæ×KiY ev †μvK Av‡`kK…Z m¤úwËi g~‡j¨i mgcwigvY A_©`Ð ev Dfq `‡Ð `wÐZ nB‡eb| 6| Z_¨ cÖKv‡ki `Ð| (1) †Kvb e¨w³ Amr D‡Ï‡k¨ Z`šÍ m¤úwK©Z †Kvb Z_¨ ev cÖvmswMK Ab¨ †Kvb Z_¨ †Kvb e¨w³, ms¯’v ev msev` gva¨‡g cÖKvk Kwi‡eb bv| (2) GB Aa¨v‡`‡ki Aaxb ÿgZvcÖvß †Kvb e¨w³, cÖwZôvb ev G‡R›U KZ…©K PvKzixiZ ev wb‡qvMiZ _vKv Ae¯’vq wKsev PvKzix ev wb‡qvMRwbZ Pzw³ Aemvq‡bi ci ZrKZ…©K msM„nxZ, cÖvß, AvnwiZ, ÁvZ †Kvb Z_¨ GB Aa¨v‡`‡ki D‡Ïk¨ c~iY e¨ZxZ Ab¨ †Kvb D‡Ï‡k¨ e¨envi ev cÖKvk Kiv nB‡Z weiZ _vwK‡eb| (3) †Kvb e¨w³ Dc-aviv (1) I (2) Gi weavb jsNb Kwi‡j wZwb AbwaK 2 (`yB) ermi ch©šÍ Kvi`Ð ev Ab~aŸ© 50 (cÂvk) nvRvi UvKv ch©šÍ A_©`Ð ev Dfq `‡Ð `wÐZ nB‡eb| 7| Z`‡šÍ evav ev Amn‡hvwMZv, cÖwZ‡e`b †cÖi‡Y e¨_©Zv ev Z_¨ mieiv‡n evav †`Iqvi`Ð| (1) †Kvb e¨w³ GB Aa¨v‡`‡ki Aaxb􀁿 (K) †Kvb Z`šÍ Kvh©μ‡g Z`šÍKvix Kg©KZ©v‡K evav cÖ`vb Kwi‡j ev mn‡hvwMZv cÖ`v‡b A¯^xK…wZ Ávcb Kwi‡j; ev (L) hyw³msMZ KviY e¨wZ‡i‡K hvwPZ †Kvb cÖwZ‡e`b †cªi‡Y ev Z_¨ mieiv‡n A¯^xK…wZ Ávcb Kwi‡j; wZwb GB Aa¨v‡`‡ki Aaxb Aciva Kwiqv‡Qb ewjqv MY¨ nB‡eb| (2) †Kvb e¨w³ Dc-aviv (1) Gi Aaxb Aciv‡a †`vlx mve¨¯Í nB‡j wZwb AbwaK 1 (GK) ermi ch©šÍ Kviv`Ð ev Ab~aŸ© 25 (cuwPk) nvRvi UvKv ch©šÍ A_©`Ð ev Dfq `‡Ð `wÐZ nB‡eb| 8| wg_¨v Z_¨ cÖ`v‡bi `Ð| (1) †Kvb e¨w³ ÁvZmv‡i A‡_©i Drm ev wbR cwiwPwZ ev wnmve avi‡Ki cwiwPwZ m¤ú‡K© ev †Kvb wnmv‡ei myweav‡fvMx ev bwgbx m¤ú‡K© †Kvbiƒc wg_¨v Z_¨ cÖ`vb Kwi‡eb bv| (2) †Kvb e¨w³ Dc-aviv (1) Gi weavb jsNb Kwi‡j wZwb AbwaK 3 (wZb) ermi ch©šÍ Kviv`Ð ev Ab~aŸ© 50 (cÂvk) nvRvi UvKv ch©šÍ A_©`Ð ev Dfq `‡Ð `wÐZ nB‡eb| 9| Aciv‡ai Z`šÍ I wePvi: (1) Ab¨ AvB‡b hvnv wKQyB _vKzK bv †Kb GB Aa¨v‡`‡ki Aaxb Acivamg~n `ybx©wZ `gb Kwgkb AvBb, 2004 (2004 m‡bi 5bs AvBb) Gi Aaxb Zdwmjfy³ Aciva M‡Y¨ `ybx©wZ `gb Kwgkb ev Kwgkb nB‡Z Z`y‡Ï‡k¨ ÿgZvcÖvß Kwgk‡bi †Kvb Kg©KZ©v ev `ybx©wZ `gb Kwgkb nB‡Z ÿgZvcÖvß Ab¨ †Kvb Z`šÍKvix ms¯’vi Kg©KZ©v KZ…©K Z`šÍ‡hvM¨ nB‡e| (2) GB Aa¨v‡`‡ki Aaxb Acivamg~n Criminal Law (Amendment) Act, 1958 (Act XL of 1958) Gi section 3 Gi Aaxb wbhy³ †¯úkvj RR KZ…©K wePvh© nB‡e| (3) Awfhy³ e¨w³i m¤úwË AbymÜvb I mbv³Ki‡Yi wbwgË `ybx©wZ `gb Kwgkb GB Aa¨v‡`‡ki cvkvcvwk `ybx©wZ `gb Kwgkb AvBb, 2004 (2004 m‡bi 5bs AvBb) G cÖ`Ë ÿgZvI cÖ‡qvM Kwi‡Z cvwi‡e Ges `ybx©wZ `gb Kwgkb nB‡Z ÿgZvcÖvß Ab¨ †Kvb Z`šÍKvix ms¯’vi Kg©KZ©v GB Aa¨v‡`‡ki cvkvcvwk Ab¨ AvB‡b cÖ`Ë ÿgZvI cÖ‡qvM Kwi‡Z cvwi‡e| 10| †¯úkvj RR Gi we‡kl GLwZqvi: (1) †¯úkvj RR GB Aa¨v‡`‡ki Aaxb Aciv‡ai Rb¨ wba©vwiZ `Ð Av‡ivc Ges †ÿÎgZ, AwaKZi Z`šÍ, m¤úwË Aeiæ×KiY, †μvK, ev‡RqvßKiY Av‡`kmn Avek¨K Ab¨ †Kvb Av‡`k cÖ`vb Kwi‡Z cvwi‡eb| (2) †¯úkvj RR GB Aa¨v‡`‡ki Aaxb `v‡qiK…Z †Kvb gvgjvq AwaKZi Z`‡šÍi Av‡`k cÖ`vb Kwi‡j D³iƒc Av‡`‡k Z`šÍKvix Kg©KZ©v‡K Z`šÍ cÖwZ‡e`b `vwL‡ji Rb¨ GKwU mgqmxgv wbw`©ó Kwiqv w`‡eb, hvnv 6 (Qq) gv‡mi AwaK nB‡e bv| 11| Aciv‡ai Avgj‡hvM¨Zv, A-Av‡cvl‡hvM¨Zv I A-Rvwgb‡hvM¨Zv: GB Aa¨v‡`‡ki Aaxb Acivamg~n Avgj‡hvM¨ (cognizable), A-Av‡cvl‡hvM¨ (non-compoundable) Ges A-Rvwgb‡hvM¨ (non-bailable) nB‡e| 22| Avcxj: AvcvZZt ejer Ab¨ †Kvb AvB‡b hvnv wKQB _vKzb bv †Kb, Av`vjZ KZ…©K GB Aa¨v‡`‡ki Aaxb cÖ`Ë †Kvb Av‡`k, ivq, wWwμ ev Av‡ivwcZ `Û Øviv msÿzä cÿ, D³iƒc Av‡`k, ivq, wWwμ ev `Ûv‡`k cÖ`v‡bi ZvwiL nB‡Z 30 (wÎk) w`‡bi g‡a¨ nvB‡KvU© wefv‡M Avcxj Kwi‡Z cvwi‡e| 23| gvwbjÛvwis Aciva `gb I cÖwZ‡iv‡a evsjv‡`k e¨vs‡Ki ÿgZv I `vwqZ¡: (1) GB Aa¨v‡`‡ki D‡Ïk¨ c~iYK‡í evsjv‡`k e¨vs‡Ki wbgoeiƒc ÿgZv I `vwqZ¡ _vwK‡e, h_v t (K) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v nB‡Z cÖvß bM` †jb‡`b I m‡›`nRbK †jb‡`b m¤úwK©Z Z_¨vw` we‡kølY ev ch©v‡jvPbv I we‡kølY ev ch©v‡jvPbvi D‡Ï‡k¨ AwZwi³ †h †Kvb Z_¨ wi‡cvU© cÖ`vbKvix ms¯’v nB‡Z msMÖn Ges Dnvi WvUv msiÿY Kiv Ges †ÿÎgZ, mswkøó AvBb cÖ‡qvMKvix ms¯’v‡K cÖ‡qvRbxq Kvh©μg MÖn‡Yi Rb¨ D³ Z_¨vw` cÖ`vb Kiv; (L) †Kvb †jb‡`b gvwbjÛvwis ev †Kvb m¤ú„³ Aciva Gi mwnZ m¤ú„³ ewjqv aviYv Kwievi hyw³msMZ KviY _vwK‡j wi‡cvU© cÖ`vbKvix ms¯’v nB‡Z D³iƒc †jb‡`b m¤úwK©Z †h †Kvb Z_¨ ev cÖwZ‡e`b msMÖn Kiv; (M) †Kvb Aciva msNU‡bi gva¨‡g †Kvb A_© ev m¤úwË †Kvb wnmv‡e Rgv nBqv‡Q g‡g© m‡›`n Kwievi hyw³msMZ KviY _vwK‡j †Kvb wi‡cvU© cÖ`vbKvix ms¯’v‡K AbwaK 30 (wÎk) w`‡bi Rb¨ D³ wnmv‡ei †jb‡`b ¯’wMZ ev Aeiæ× ivwLevi wb‡`©k cÖ`vb Kiv t Z‡e kZ© _v‡K †h, D³ wnmv‡ei †jb‡`b m¤úwK©Z mwVK Z_¨ DrNvU‡bi cÖ‡qvRb †`Lv w`‡j †jb‡`b ¯’wMZ ev Aeiæ× ivwLevi †gqv` AwZwi³ 30 (wÎk) w`b Kwiqv m‡e©v”P 6 (Qq) gvm ewa©Z Kiv hvB‡e; (N) gvwbjÛvwis cÖwZ‡iva Kwievi D‡Ï‡k¨ wi‡cvU© cÖ`vbKvix ms¯’v‡K, mgq mgq, cÖ‡qvRbxq wb‡`©kbv cÖ`vb Kiv; (O) wi‡cvU© cÖ`vbKvix ms¯’v evsjv‡`k e¨vsK KZ…©K hvwPZ Z_¨ ev cÖwZ‡e`b mwVKfv‡e †cÖiY Kwiqv‡Q wKbv wKsev Z`&KZ…©K cÖ`Ë wb‡`©kbv h_vh_fv‡e cwicvjb Kwiqv‡Q wKbv Zvnv Z`viwK Kiv Ges cÖ‡qvR‡b, wi‡cvU© cÖ`vbKvix ms¯’v m‡iRwgb cwi`k©b Kiv; (P) GB AvB‡bi myôz cÖ‡qvM wbwðZ Kwievi D‡Ï‡k¨ wi‡cvU© cÖ`vbKvix ms¯’vmn evsjv‡`k e¨vs‡Ki we‡ePbvq †h †Kvb ms¯’v ev cÖwZôv‡bi Kg©KZ©v I Kg©Pvix‡`i Rb¨ cÖwkÿ‡Yi e¨e¯’vmn mfv, †mwgbvi, BZ¨vw`i Av‡qvRb Kiv; (Q) GB Aa¨v‡`‡ki D‡Ïk¨ c~iYK‡í cÖ‡qvRbxq Ab¨ †h †Kvb Kvh© m¤úv`b Kiv| (2) gvwbjÛvwis ev m‡›`nRbK †jb‡`b Z`‡šÍ Z`šÍKvix ms¯’v †Kvb Z_¨ mieiv‡ni Aby‡iva Kwi‡j, cÖPwjZ AvB‡bi AvIZvq ev hw` Ab¨ †Kvb Kvi‡Y eva¨eva¨KZv bv _v‡K, Zvnv nB‡j evsjv‡`k e¨vsK D³ Z_¨ cÖ`vb Kwi‡e| (3) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v GB avivi Aaxb †Kvb hvwPZ Z_¨ h_vmg‡q mieivn Kwi‡Z e¨_© nB‡j evsjv‡`k e¨vsK D³ ms¯’v‡K cÖwZw`b 10 (`k) nvRvi UvKv wnmv‡e m‡e©v”P 5 (cuvP) jÿ UvKv ch©šÍ Rwigvbv Kwi‡Z cvwi‡e Ges †Kvb ms¯’v 1 (GK) A_© erm‡i 3 (wZb) ev‡ii AwaK Rwigvbvi m¤§yLxb nB‡j evsjv‡`k e¨vsK D³ ms¯’v ev ms¯’vi †Kvb kvLv, mvwf©m †m›Uvi, ey ev G‡R‡›Ui evsjv‡`‡k Kvh©μg cwiPvjbv iwnZ Kwievi D‡Ï‡k¨ wbeÜb ev jvB‡mÝ ¯’wMZ Kwi‡Z cvwi‡e ev †ÿÎgZ, wbeÜbKvix ev jvB‡mÝ cÖ`vbKvix KZ…©cÿ‡K D³ ms¯’vi weiæ‡× h_vh_ e¨e¯’v MÖn‡Yi wbwgË welqwU AewnZ Kwi‡e| (4) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v GB avivi Aaxb hvwPZ wel‡q †Kvb fyj ev wg_¨v Z_¨ ev weeiYx mieivn Kwi‡j evsjv‡`k e¨vsK D³ ms¯’v‡K Ab~¨b 20 (wek) nvRvi UvKv I m‡e©v”P 5 (cuvP) jÿ UvKv ch©šÍ Rwigvbv Kwi‡Z cvwi‡e Ges †Kvb ms¯’v 1 (GK) A_© erm‡I 3 (wZb) ev‡ii AwaK Rwigvbvi m¤§yLxb nB‡j evsjv‡`k e¨vsK D³ ms¯’v ev ms¯’vi †Kvb kvLv, mvwf©m †m›Uvi, ey ev G‡R‡›Ui evsjv‡`‡k Kvh©μg cwiPvjbv iwnZ Kwievi D‡Ï‡k¨ wbeÜb ev jvB‡mÝ ¯’wMZ Kwi‡Z cvwi‡e ev †ÿÎgZ, wbeÜbKvix ev jvB‡mÝ cÖ`vbKvix KZ…©cÿ‡K D³ ms¯’vi weiæ‡× h_vh_ e¨e¯’v MÖn‡Yi wbwgË welqwU AewnZ Kwi‡e| (5) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v evsjv‡`k e¨vsK KZ…©K GB Aa¨v‡`‡ki AvIZvq RvixK…Z †Kvb wb‡`©kbv cwicvj‡b e¨_© nB‡j evsjv‡`k e¨vsK D³ ms¯’v‡K cÖwZw`b 10 (`k) nvRvi UvKv wnmv‡e m‡e©v”P 5 (cuvP) jÿ UvKv ch©šÍ cÖwZwU Acwicvjbxq wel‡qi Rb¨ Rwigvbv Kwi‡Z cvwi‡e Ges †Kvb ms¯’v 1 (GK) A_© erm‡i 3 (wZb) ev‡ii AwaK Rwigvbvi m¤§yLxb nB‡j evsjv‡`k e¨vsK D³ ms¯’v ev ms¯’vi †Kvb kvLv, mvwf©m †m›Uvi, ey ev G‡R‡›Ui evsjv‡`‡k Kvh©μg cwiPvjbv iwnZ Kwievi D‡Ï‡k¨ wbeÜb ev jvB‡mÝ ¯’wMZ Kwi‡Z cvwi‡e ev †ÿÎgZ, wbeÜbKvix ev jvB‡mÝ cÖ`vbKvix KZ…©cÿ‡K D³ ms¯’vi weiæ‡× h_vh_ e¨e¯’v MÖn‡Yi wbwgË welqwU AewnZ Kwi‡e| (6) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v Dc-aviv (1) Gi `dv (M) Gi AvIZvq evsjv‡`k e¨vsK KZ…©K wb‡`©wkZ †Kvb Aeiæ× ev ¯’wMZ Av‡`k cwicvj‡b e¨_© nB‡j evsjv‡`k e¨vsK D³ wi‡cvU© cÖ`vbKvix ms¯’v‡K Ab~¨b D³ e¨vsK wnmv‡e w¯’wZi mgcwigvY Rwigvbv Kwi‡Z cvwi‡e hvnv wb‡`k©bv Rvixi Zvwi‡L wnmv‡e w¯’wZi wظ‡Yi AwaK nB‡e bv| (7) GB AvB‡bi aviv 23 I 25 Abyhvqx evsjv‡`k e¨vsK KZ…©K Av‡ivwcZ Rwigvbv †Kvb& e¨w³ ev mËv ev wi‡cvU© cÖ`vbKvix ms¯’v cÖ`v‡b e¨_© nB‡j evsjv‡`k e¨vsK mswkøó e¨w³ ev mËv ev wi‡cvU© cÖ`vbKvix ms¯’vi wbR bv‡g †h †Kvb e¨vsK ev Avw_©K cÖwZôvb ev evsjv‡`k e¨vs‡K cwiPvwjZ wnmve weKjbc~e©K Av`vq Kwi‡Z cvwi‡e Ges G‡ÿ‡Î Rwigvbvi †Kvb Ask Abv`vqx _vwK‡j Zvnv Av`v‡q cÖ‡qvR‡b evsjv‡`k e¨vsK Av`vj‡Z Av‡e`b Kwi‡Z cvwi‡e Ges Av`vjZ †hBiƒc Dchy³ we‡ePbv Kwi‡e †mBiƒc Av‡`k cÖ`vb Kwi‡e| (8) Dc-aviv (3), (4), (5) I (6) Abyhvqx †Kvb wi‡cvU© cÖ`vbKvix ms¯’v‡K Rwigvbv Kiv nB‡j GB Rb¨ `vqx D³ ms¯’vi gvwjK, cwiPvjK, Kg©KZ©v-Kg©Pvix ev Pzw³wfwËK wb‡qvwRZ e¨w³M‡Yi weiæ‡×I evsjv‡`k e¨vsK Ab~¨b 10(`k) nvRvi UvKv I m‡ev©”P 5(cuvP) jÿ UvKv ch©šÍ Rwigvbv Kwi‡Z cvwi‡e Ges cÖ‡qvR‡b mswkøó ms¯’v‡K cÖ‡qvRbxq cÖkvmwbK e¨e¯’v MÖn‡Yi Rb¨ wb‡`©kbv cÖ`vb Kwi‡Z cvwi‡e| 24| evsjv‡`k dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU (BFIU) cÖwZôv: (1) GB Aa¨v‡`‡ki aviv 23 G evsjv‡`k e¨vs‡Ki Dci Awc©Z ÿgZv I `vwqZ¡ cwicvj‡bi j‡ÿ¨ evsjv‡`k e¨vs‡K evsjv‡`k dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU (Bangladesh Financial Intelligence Unit ev BFIU) bv‡g GKwU ¯^Zš¿ BDwbU _vwK‡e| (2) GB Aa¨v‡`‡ki D‡Ïk¨ c~iYK‡í miKvwi, Avav-miKvwi, ¯^vqËkvwmZ ms¯’vmg~n ev Ab¨ †Kvb mswkøó cÖwZôvb ev ms¯’v Z`&KZ…©K msiwÿZ ev msM„nxZ Z_¨vw` evsjv‡`k dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU‡K ¯^cÖ‡bvw`Zfv‡e ev Aby‡iv‡ai m~‡Î mieivn Kwi‡e| (3) evsjv‡`k dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU Ab¨vb¨ AvBb cÖ‡qvMKvix ms¯’v‡K gvwb jÛvwis I mš¿vmx Kv‡h© A_© †hvMvb mswkøó Z_¨vw` cÖ‡qvR‡b ¯^-D‡`¨v‡M mieivn Kwi‡Z cvwi‡e| (4) GB AvB‡bi weavb Abyhvqx Ab¨ †Kvb †`‡ki mwnZ m¤úvw`Z †Kvb Pyw³ ev e¨e¯’vi Aaxb mswkøó †`‡ki dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU‡K gvwbjÛvwis ev mš¿vmx Kv‡h© A_©vqb ev †Kvb m‡›`nRbK †jb‡`b m¤úwK©Z Z_¨vw` mieivn Kwi‡e Ges Ab¨ †Kvb †`‡ki wbKU nB‡Z Abyiƒc Z_¨ Pvwn‡Z cwi‡e| (5) Dc-aviv (4) G ewY©Z Pyw³ ev e¨e¯’v QvovI evsjv‡`k dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU †ÿÎgZ, ¯^cÖ‡Yvw`Zfv‡e Ab¨ †`‡ki dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU‡K Z_¨ mieivn Kwi‡Z cvwi‡e| 25| gvwbjÛvwis Aciva cÖwZ‡iv‡a wi‡cvU© cÖ`vbKvix ms¯’vi `vq-`vwqZ¡: (1) gvwbjÛvwis Aciva cÖwZ‡iv‡a wi‡cvU© cÖ`vbKvix ms¯’vi wbgoeiƒc `vq-`vwqZ¡ _vwK‡e, h_v t (K) Dnvi MÖvn‡Ki wnmve cwiPvjbvKv‡j MÖvn‡Ki cwiwPwZi mwVK I c~Y©v½ Z_¨ msiÿY Kiv; (L) †Kvb MÖvn‡Ki wnmve eÜ nB‡j eÜ nBevi ZvwiL nB‡Z Ab~¨b 5 (cuvP) ermi ch©šÍ D³ wnmv‡ei †jb‡`b msμvšI Z_¨ msiÿY Kiv; (M) `dv (K) I (L) Gi Aaxb msiwÿZ Z_¨vw` evsjv‡`k e¨vs‡Ki Pvwn`v †gvZv‡eK, mgq mgq, mieivn Kiv; (N) aviv 2 (h) G msÁvwqZ †Kvb m‡›`nRbK †jb‡`b ev †jb‡`‡bi cÖ‡Póv cwijwÿZ nB‡j ¯^-D‡`¨v‡M Awej‡¤^ evsjv‡`k e¨vs‡K Ôm‡›`nRbK †jb`b wi‡cvU©Õ Kiv| (2) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v Dc-aviv (1) Gi weavb jsNb Kwi‡j evsjv‡`k e¨vsK- (K) D³ ms¯’v‡K Ab~¨b 50 (cÂvk) nvRvi UvKv Ges m‡e©v”P 25 (cuwPk) jÿ UvKv ch©šÍ Rwigvbv Kwi‡Z cvwi‡e; Ges (L) `dv (K) Gi Aaxb Av‡ivwcZ Rwigvbvi AwZwi³ D³ ms¯’v ev ms¯’vi †Kvb kvLv, mvwf©m †m›Uvi, ey ev G‡R‡›Ui e¨emvwqK Kvh©μ‡gi AbygwZ ev jvB‡mÝ evwZj Kwi‡Z cvwi‡e ev †ÿÎgZ, wbeÜbKvix ev jvB‡mÝ cÖ`vbKvix KZ…©cÿ‡K D³ ms¯’vi weiæ‡× h_vh_ e¨e¯’v MÖn‡Yi wbwg‡Ë welqwU AewnZ Kwi‡e| (3) Dc-aviv (2) Gi Aaxb Av‡ivwcZ Rwigvbvi A_© evsjv‡`k e¨vsK ZrKZ…©K wba©vwiZ c×wZ‡Z Av`vq Kwi‡e Ges Av`vqK…Z A_© ivóªxq †KvlvMv‡i Rgv Kwi‡e| 1.3 What Is Terrorist Financing Terrorist financing can be simply defined as financial support in any form of terrorism or of those who encourage, plan, or engage in terrorism. The International Convention for 1 Predicate offence is the underlying criminal activity that generated proceeds, which when laundered, results in the offense of money laundering. the Suppression of the Financing of Terrorism (1999) under the United Nations defines TF in the following manner: 1. If any person commits an offense by any means, directly or indirectly, unlawfully and willingly, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out: a. An act which constitutes an offence within the scope of and as defined in one of the treaties listed in the annex; or b. Any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking any active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organization to do or to abstain from doing an act. 2. (Deleted by UN) 3. For an act to constitute an offense set forth in the preceding paragraph 1, it shall not be necessary that the funds were actually used to carry out an offense referred to in said paragraph 1, subparagraph (a) or (b)2. Some countries face difficulties in defining terrorism as not all countries have adopted the conventions agreed on specifically what actions constitute terrorism. In addition, the meaning of terrorism is not universally accepted due to significant political, religious and national implications that differ from country to country. FATF, which is recognized as the international standard setter for combating financing of terrorism (CFT) efforts, does not specifically define the term financing of terrorism in its nine Special Recommendations on Terrorist Financing (Special Recommendations). Nonetheless, FATF urges countries to ratify and implement the 1999 United Nations International Convention for Suppression of the Financing of Terrorism. Thus, the above definition is the one most countries have adopted for purposes of defining terrorist financing. According to the article 7 of the Anti Terrorism Act, 2009, financing of terrorism means: 2 International Convention for the Suppression of the Financing of Terrorism (1999), Article,http://www.un.org/law/cod/finterr.htm. The treaties referred to annex in sub‐paragraph 1(a) shall be available in this web link. (1) Whoever provides or incites to provide money, service or property and intends that it should be used, or has reasonable ground to suspect that it will or may be used for the purpose of terrorist acts; commits an act of terrorist financing. (2) Whoever receives money, service or property and intends that it should be used, or has reasonable ground to suspect that it will or may be used for the purpose of terrorist acts; commits an act of terrorist financing. (3) Whoever arranges money, service or property and intends that it should be used, or has reasonable ground to suspect that it will or may be used for the purpose of terrorist acts; commits an act of terrorist financing. (4) A person guilty of the offence as described in the subsections from 1 to 3 shall be punished with imprisonment for a term which may extend to twenty years and it shall not be less than three years, to which fine may also be added. 4| 2009 m‡bi 16 bs AvB‡bi aviv 5 Gi cÖwZ¯’vcb|⎯ D³ AvB‡bi aviv 5 Gi cwie‡Z© wbgoeiƒc aviv 5 cÖwZ¯’vwcZ nB‡e, h_v t⎯ Ò5| AwZivwóªK cÖ‡qvM|⎯(1) hw` †Kvb e¨w³ ev mËv evsjv‡`‡ki evwni nB‡Z evsjv‡`‡ki Af¨šÍ‡i †Kvb Aciva msNUb K‡i hvnv D³ e¨w³ ev mËv KZ…©K evsjv‡`‡ki Af¨šÍi nB‡Z msNwUZ nB‡j GB AvB‡bi Aaxb kvw¯Í‡hvM¨ nBZ, Zvnv nB‡j D³ Aciva evsjv‡`‡k msNwUZ nBqv‡Q ewjqv MY¨ nB‡e Ges D³ e¨w³ ev mËv I Aciv‡ai †ÿ‡Î GB AvB‡bi weavbvejx cÖ‡hvR¨ nB‡e| (2) hw` †Kvb e¨w³ ev mËv evsjv‡`‡ki Af¨šÍi nB‡Z evsjv‡`‡ki evwn‡i †Kvb Aciva msNUb K‡i, hvnv evsjv‡`‡k msNwUZ nB‡j GB AvB‡bi Aaxb kv¯Í‡hvM¨ nBZ, Zvnv nB‡j D³ Aciva evsjv‡`‡k msNwUZ nBqv‡Q ewjqv MY¨ nB‡e Ges D³ e¨w³ ev mËv I Aciv‡ai †ÿ‡Î GB AvB‡bi weavbvejx cÖ‡hvR¨ nB‡e|Ó| 6| 2009 m‡bi 16 bs AvB‡bi aviv 7 Gi cÖwZ¯’vcb⎯ D³ AvB‡bi aviv 7 Gi cwie‡Z© wbgoeiƒc aviv 7 cÖwZ¯’vwcZ nB‡e, h_v t⎯ Ò7| mš¿vmx Kv‡h© A_©vqb msμvšI Aciva|⎯ (1) hw` †Kvb e¨w³ ev mËv ÁvZmv‡I Ab¨ †Kvb e¨w³ ev mËv‡K A_©, †mev-e¯‘MZ mnvqZv (material support), ev Ab¨ †Kvb m¤úwË mieivn K‡ib ev mieiv‡ni AwfcÖvq cÖKvk K‡ib hvnv‡Z Bnv wek¦vm Kwievi hyw³m½Z KviY _v‡K †h, Dnv m¤ú~Y© ev AvswkKfv‡e †Kvb mš¿vmx e¨w³ ev mËv ev †Mvôx ev msMVb KZ…©K †h †Kvb D‡Ï‡k¨ e¨envi Kiv nBqv‡Q ev nB‡Z cv‡i, Zvnv nB‡j wZwb ev D³ mËv mš¿vmx Kv‡h© A_©vq‡bi Aciva msNUb Kwiqv‡Qb ewjqv MY¨ nB‡eb| 2| hw` †Kvb e¨w³ ev mËv ÁvZmv‡i Ab¨ †Kvb e¨w³ ev mËvi wbKU nB‡Z A_©, †mev, e¯‘MZ mnZvq (material support) , ev Ab¨ †Kvb m¤úwË MÖnY K‡ib hvnv‡Z Bnv wek¦vm Kwievi hyw³m½Z KviY _v‡K †h, Dnv m¤ú~Y© ev AvswkKfv‡e †Kvb mš¿vmx e¨w³ ev mËv ev †Mvôx ev msMVb KZ…©K †h †Kvb D‡Ï‡k¨ e¨envi Kiv nBqv‡Q ev nB‡Z cv‡i, Zvnv nB‡j wZwb ev D³ mËv mš¿vmx Kv‡h© A_©vq‡bi Aciva msNUb Kwiqv‡Qb ewjqv MY¨ nB‡eb| (3) hw` †Kvb e¨w³ ev mËv ÁvZmv‡i Ab¨ †Kvb e¨w³ ev mËvi Rb¨ A_©, †mev, e¯‘MZ mnvqZv (material support), ev Ab¨ †Kvb m¤úwËi e¨e¯’v K‡ib hvnv‡Z Bnv wek¦vm Kwievi hyw³m½Z KviY _v‡K †h, Dnv m¤ú~Y© ev AvswkKfv‡e †Kvb mš¿vmx e¨w³ ev mËv ev †Mvôx ev msMVb KZ…©K †h †Kvb D‡Ï‡k¨ e¨envi Kiv nBqv‡Q ev nB‡Z cv‡i, Zvnv nB‡j wZwb ev D³ mËv mš¿vmx Kv‡h© A_©vq‡bi Aciva msNUb Kwiqv‡Qb ewjqv MY¨ nB‡eb| (4) hw` †Kvb e¨w³ ev mËv ÁvZmv‡i Ab¨ †Kvb e¨w³ ev mËv‡K A_©, †mev, e¯‘MZ mnvqZv (material support), ev Ab¨ †Kvb m¤úwË mieivn ev MÖnY ev e¨e¯’v Kwievi †ÿ‡Î Ggbfv‡e cÖ‡ivwPZ K‡ib hvnv‡Z Bnv wek¦vm Kwievi hyw³msMZ KviY _v‡K †h, Dnv m¤ú~Y© ev AvswkKfv‡e †Kvb mš¿vmx e¨w³ ev mËv ev †Mvôx ev msMVb KZ…©K †h †Kvb D‡Ï‡k¨ e¨envi Kiv nBqv‡Q ev nB‡Z cv‡i, Zvnv nB‡j wZwb ev D³ mËv mš¿vmx Kv‡h© A_©vq‡bi Aciva msNUb Kwiqv‡Qb ewjqv MY¨ nB‡eb| (5) Dc-aviv (1) nB‡Z (4) G ewY©Z Aciv‡a †Kvb e¨w³ †`vl mve¨¯Í nB‡j, D³ e¨w³ AbwaK wek ermi I Ab~¨b Pvi ermi ch©šÍ †h †Kvb †gqv‡`i Kviv`‡Ð `wÐZ nB‡eb, Ges Bnvi AwZwi³ Aciv‡ai mwnZ mswkøó m¤úwËi wظY g~‡j¨i mgcwigvY ev 10(`k) jÿ UvKv, hvnv AwaK, †mB cwigvY A_©`ÐI Av‡ivc Kiv hvB‡e| (6) (K) Dc-aviv (1) nB‡Z (4) G ewY©Z Aciv‡a †Kvb mËv †`vlx mve¨¯Í nB‡j aviv 18 Gi weavb Abyhvqx e¨e¯’v MÖnY Kiv hvB‡e Ges Bnvi AwZwi³ Aciv‡ai mwnZ mswkøó m¤úwËi wZb¸Y g~‡j¨i mgcwigvY ev 50 (cÂvk) jÿ UvKv, hvnv AwaK, †mB cwigvY A_©`ÐI Av‡ivc Kiv hvB‡e; Ges (6) (L) D³ mËvi cÖavb, Zvnv‡K †Pqvig¨vb, e¨e¯’vcbv cwiPvjK, cÖavb wbe©vnx ev Ab¨ †h †Kvb bv‡g WvKv nBK bv †Kb, wZwb AbwaK wek ermi I Ab~¨b Pvi ermi ch©šÍ †h †Kvb †gqv‡`i Kviv`‡Û `wÐZ nB‡eb, Ges Bnvi AwZwi³ Aciv‡ai mwnZ mswkøó m¤úwËi wظY g~‡j¨i mgcwigvY ev 20 (wek) jÿ UvKv, hvnv AwaK, †mB cwigvY A_©`‡ÐI `wÐZ nB‡eb hw` bv wZwb cÖgvY Kwi‡Z mÿg nb †h, D³ Aciva Zvnvi AÁvZmv‡i msNwUZ nBqv‡Q A_ev D³ Aciva †iva Kwievi Rb¨ wZwb h_vmva¨ †Póv Kwiqv‡Qb|Ó| 8| 2009 m‡bi 16 bs AvB‡bi aviv 15 Gi cÖwZ¯’vcb ⎯ D³ AvB‡bi aviv 15 Gi cwie‡Z© wbgoeiƒc aviv 15 cÖwZ¯’vwcZ nB‡e, h_v t⎯ Ò15| evsjv‡`k e¨vs‡Ki ÿgZv ⎯ (1) GB AvB‡bi Aaxb †Kvb Aciva msNU‡bi D‡Ï‡k¨ †Kvb wi‡cvU© cÖ`vbKvix ms¯’vi gva¨‡g †jb‡`b cÖwZ‡iva I mbv³ Kwi‡Z evsjv‡`k e¨vsK cÖ‡qvRbxq c`‡ÿc MÖnY Kwi‡Z cvwi‡e Ges GZ`y‡Ï‡k¨ Dnvi wbgoeewY©Z ÿgZv I KZ…©Z¡ _vwK‡e, h_v t⎯ (K) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v nB‡Z m‡›`nRbK †jb‡`b m¤úwK©Z cÖwZ‡e`b Zje Kiv; (L) Dc-`dv (K) Abyhvqx cÖvß cÖwZ‡e`b mswkøó AvBb cÖ‡qvMKvix ms¯’v‡K cÖ‡qvRbxq Kvh©μg MÖn‡Yi Rb¨ cÖ`vb Kiv ev †ÿÎgZ, ˆe‡`wkK AvBb cÖ‡qvMKvix ms¯’vi Aby‡iv‡ai †cÖwÿ‡Z D³ ms¯’v‡K cÖ`vb Kiv ev D³ cÖwZ‡e`‡bi wel‡q Z_¨ wewbgq Kiv; (M) mKj cwimsL¨vb I †iKW© msKjb I msiÿY Kiv; (N) mKj m‡›`nRbK †jb‡`b m¤úwK©Z wi‡cv‡U©i WvUv-†eR m„wó I iÿYv‡eÿY Kiv; (O) m‡›`nRbK †jb‡`b m¤úwK©Z cÖwZ‡e`b we‡kølY Kiv; (P) †Kvb †jb‡`b mš¿vmx Kv‡h©i mwnZ m¤ú„³ g‡g© m‡›`n Kwievi hyw³m½Z KviY _vwK‡j mswkøó wi‡cvU© cÖ`vbKvix ms¯’v‡K D³ †jb‡`‡bi wnmve AbwaK 30 (wÎk) w`‡bi Rb¨ ¯’wMZ ev Aeiæ× ivwLevi D‡Ïk¨ wjwLZ Av‡`k Rvix Kiv Ges GBiƒ‡c D³ wnmv‡ei †jb‡`b m¤úwK©Z mwVK Z_¨ D˜NvU‡bi cÖ‡qvRb †`Lv w`‡j †jb‡`b ¯’wMZ ev Aeiæ× ivwLevi †gqv` AwZwi³ 30 (wÎk) w`b Kwiqv m‡e©v”P 6(Qq) gvm ewa©Z Kiv; (Q) wi‡cvU© cÖ`vbKvix ms¯’vi Kvh©vejx cwiexÿY I Z`viK Kiv; (R) mš¿vmx Kv‡h© A_© †hvMvb cÖwZnZ Kwievi D‡Ï‡k¨ cÖwZ‡ivag~jK c`‡ÿc MÖn‡Y wi‡cvU© cÖ`vbKvix ms¯’vmg~n‡K wb‡`©k cÖ`vb Kiv; (S) mš¿vmx Kv‡h© A_©vq‡bi mwnZ RwoZ m‡›`nRbK †jb‡`b mbv‡³i D‡Ï‡k¨ wi‡cvU© cÖ`vbKvix ms¯’vmg~n cwi`k©b Kiv; Ges (T) mš¿vmx Kv‡h© A_© †hvMv‡bi mwnZ RwoZ m‡›`nRbK †jb‡`b mbv³ I cÖwZ‡iv‡ai D‡Ï‡k¨ wi‡cvU© cÖ`vbKvix ms¯’vmg~‡ni Kg©KZ©v I Kg©PvixMY‡K cÖwkÿY cÖ`vb Kiv| (2) evsjv‡`k e¨vsK, mš¿vmx Kv‡h© A_© †hvMv‡bi mwnZ RwoZ m‡›`nRbK †Kvb †jb‡`‡bi welq †Kvb wi‡cvU© cÖ`vbKvix ms¯’v ev Bnvi MÖvnK‡K mbv³ Kwievi m‡½ m‡½, Dnv h_vh_ AvBb cÖ‡qvMKvix ms¯’v‡K AewnZ Kwi‡e Ges AbymÜvb I Z`šÍ Kv‡h© D³ AvBb cÖ‡qvMKvix ms¯’v‡K cÖ‡qvRbxq mKj cÖKvi mn‡hvwMZv cÖ`vb Kwi‡e| (3) Ab¨ †`‡k msNwUZ wePvivaxb Aciv‡ai †ÿ‡Î evsjv‡`k e¨vsK miKvi KZ…©K M„nxZ †Kvb AvšÍR©vwZK, AvÂwjK ev wØ-cvwÿK Pzw³, RvwZms‡Ni Kb‡fbkb ev RvwZms‡Ni wbivcËv cwil` KZ…©K M„wnZ mswkøó †iRy‡jk‡bi AvIZvq †Kvb e¨w³ ev mËvi wnmve Rã Kivi D‡`¨vM MÖnY Kwi‡e| (4) Dc-aviv (3) Gi AvIZvq RãK…Z A_© mswkøó Pzw³, Kb‡fbkb ev RvwZms‡Ni wbivcËv cwil` KZ…©K M„wnZ mswkøó †iRy‡jk‡bi Av‡jv‡K mswkøó Av`vjZ KZ…©K wb®úwˇhvM¨ nB‡e| (5) Dc-aviv (1) nB‡Z (3) G ewY©Z `vwqZ¡ m¤úv`‡bi ¯^v‡_© miKvwi, AvavmiKvwi, ¯^vqËkvwmZ ms¯’v evsjv‡`k dvBb¨vwÝqvj Bb&‡Uwj‡RÝ BDwbU‡K Z`&KZ„K© hvwPZ Z_¨vw` mieivn Kwi‡e, ev †ÿÎgZ, ¯^cÖ‡Yvw`Z nBqv Z_¨vw` mieivn Kwi‡e| (6) evsjv‡`k dvBb¨vwÝqvj Bb&‡Uwj‡RÝ BDwbU Pvwn`v Abyhvqx ev †ÿÎgZ, ¯^cÖ‡Yvw`Zfv‡e mš¿vmx Kvh© ev mš¿vmx Kv‡h© A_©vqb m¤ú„³ Z_¨vw` Ab¨ ‡`‡ki dvBb¨vwÝqvj B‡›Uwj‡RÝ BDwbU‡K mieivn Kwi‡Z cvwi‡e| (7) mš¿vmx Kv‡h© A_©vq‡bi wel‡q Z`‡šÍi ¯^v‡_© †Kvb AvBb cÖ‡qvMKvix ms¯’v KZ…©K †Kvb e¨vs‡Ki `wjj ev †Kvb bw_‡Z wbgoeewY©Z k‡Z© cÖ‡ekvwaKvi _vwK‡e, h_v t⎯ (K) Dchy³ Av`vjZ ev UªvBey¨bv‡ji Av‡`kμ‡g; A_ev (L) evsjv‡`k e¨vs‡Ki Aby‡gv`bμ‡g|Ó| 9| 2009 m‡bi 16 bs AvB‡bi aviv 16 Gi cÖwZ¯’vcb ⎯D³ AvB‡bi aviv 16 Gi cwie‡Z© wbgoeiƒc aviv 16 cÖwZ¯’vwcZ nB‡e, h_v t⎯ Ò16| wi‡cvU© cÖ`vbKvix ms¯’vi `vwqZ¡ - (1) †Kvb wi‡cvU© cÖ`vbKvix ms¯’vi gva¨‡g GB AvB‡bi Aaxb †Kvb Aciv‡ai mwnZ RwoZ A_© †jb‡`b cÖwZ‡iva I mbv³ Kwievi j‡ÿ¨ cÖ‡Z¨K wi‡cvU© cÖ`vbKvix ms¯’v h_vh_ mZK©Zv I `vwqZ¡kxjZvi mwnZ cÖ‡qvRbxq e¨e¯’v MÖnY Kwi‡e Ges †Kvb m‡›`nRbK †jb‡`b wPwýZ nB‡j ¯^cÖ‡Yvw`Z nBqv †Kvb cªKvi wej¤^ e¨wZ‡i‡K evsjv‡`k e¨vsK‡K wi‡cvU© Kwi‡e| (2) cÖ‡Z¨K wi‡cvU© cÖ`vbKvix ms¯’vi cwiPvjbv cwil` (Board of Directors) ev cwiPvjbv cwil‡`i Abycw¯’wZ‡Z cÖavb wbe©vnx, ev Ab¨ †h bv‡g WvKv nDK bv †Kb, Dnvi Kg©KZ©v‡`i `vwqZ¡ m¤úwK©Z wb‡`©kbv Aby‡gv`b I Rvix Kwi‡e, Ges aviv 15 Gi Aaxb evsjv‡`k e¨vsK KZ…©K RvixK…Z wb‡`©kbv, hvnv wi‡cvU© cÖ`vbKvix ms¯’vmg~‡ni Rb¨ cÖ‡hvR¨, cÖwZcvjb Kiv nB‡Z‡Q wKbv Dnv wbwðZ Kwi‡e| (3) †Kvb wi‡cvU© cÖ`vbKvix ms¯’v aviv 15 Gi Aaxb evsjv‡`k e¨vsK KZ©„K cÖ`Ë †h †Kvb wb‡`©kbv cvjb Kwi‡Z e¨_© nB‡j ev ÁvZmv‡i †Kvb fyj Z_¨ mieivn A_ev wg_¨v Z_¨ ev weeiYx mieivn Kwi‡j, D³ wi‡cvU© cÖ`vbKvix ms¯’v evsjv‡`k e¨vsK KZ„K© wba©vwiZ I wb‡`©wkZ AbwaK 10 (`k) jÿ UvKv Rwigvbv cwi‡kva Kwi‡Z eva¨ _vwK‡e Ges evsjv‡`k e¨vsK D³ ms¯’v ev ms¯’vi †Kvb kvLv, mvwf©m †m›Uvi, ey ev G‡R‡›Ui evsjv‡`‡k Kvh©μg cwiPjbv iwnZ Kwievi D‡Ïk¨ wbeÜb ev jvB‡mÝ ¯’wMZ Kwi‡Z cvwi‡e ev †ÿÎgZ, wbeÜbKvix ev jvB‡mÝ cÖ`vbKvix KZ©„cÿ‡K D³ ms¯’vi weiæ‡× h_vh_ e¨e¯’v MÖn‡Yi wbwgË welqwU AewnZ Kwi‡e| (4) Dc-aviv (3) †gvZv‡eK evsjv‡`k e¨vsK KZ„K© Av‡ivwcZ Rwigvbv †Kvb wi‡cvU© cÖ`vbKvix ms¯’v cwi‡kva Kwi‡Z e¨_© nB‡j ev cwi‡kva bv Kwi‡j evsjv‡`k e¨vsK mswkøó wi‡cvU© cÖ`vbKvix ms¯’vi wbR bv‡g †h †Kvb e¨vsK ev Avw_©K cÖwZôvb ev evsjv‡`k e¨vs‡K cwiPvwjZ wnmve weKjbc~e©K Av`vq Kwi‡Z cvwi‡e Ges D³ Rwigvbvi †Kvb Ask Abv`vqx _vwK‡j Dnv Av`v‡q, cÖ‡qvR‡b, evsjv‡`k e¨vsK mswkøó Av`vj‡Z Av‡e`b Kwi‡Z cvwi‡e|Ó| 1.4 The Link between Money Laundering and Terrorist Financing The techniques used to launder money are essentially the same as those used to conceal the sources of, and uses for, terrorist financing. Funds used to support terrorism may originate from legitimate sources, criminal activities, or both. Nonetheless, disguising the source of terrorist financing, regardless of whether the source is of legitimate or illicit origin, is important. If the source can be concealed, it remains available for future terrorist financing activities. Similarly, it is important for terrorists to conceal the use of the funds so that the financing activity goes undetected. For these reasons, FATF has recommended that each country criminalizes the financing of terrorism, terrorist acts and terrorist organizations, and designates such offenses as predicate offenses of money laundering. Finally, FATF has stated that the nine Special Recommendations combined with The Forty Recommendations on money laundering constitute the basic framework for preventing, detecting and suppressing both money laundering and terrorist financing. As noted above, a significant difference between money laundering and terrorist financing is that the funds involved in terrorist financing may originate from legitimate sources as well as criminal activities. Such legitimate sources may include donations or gifts of cash or other assets to persons/organizations (e.g. foundations or charities) to support terrorist activities. 1.5 The reason of committing money laundering Criminals engage in money laundering for three main reasons: First, money represents the lifeblood of the organization that engages in criminal conduct for financial gain because it covers operating expenses, replenishes inventories, purchases the services of corrupt officials to escape detection and further the interests of the illegal enterprise, and pays for an extravagant lifestyle. To spend money in these ways, criminals must make the money they derived illegally appear legitimate. Second, a trail of money from an offense to criminals can become incriminating evidence. Criminals must obscure or hide the source of their wealth or alternatively disguise ownership or control to ensure that illicit proceeds are not used to prosecute them. Third, the proceeds from crime often become the target of investigation and seizure. To shield ill-gotten gains from suspicion and protect them from seizure, criminals must conceal their existence or, alternatively, make them look legitimate. 1.6 The reason of committing terrorism financing Terrorism financing is done mainly to facilitate an extremist group by providing financial support aiming to establish or circulate their ideology. Such financial assistance may be provided directly or indirectly or may be attempted and amount of money may be significantly low with several in numbers. 1.7 Laundering Techniques Obviously there is no single way of laundering money or any other property. It can range from the simple method to highly complex schemes involving a web of international businesses and investments. In general, money laundering process comprises three stages: Placement – placing the criminal funds into the financial system directly or indirectly. Layering – the process of separating criminal proceeds from their source by using complex layers of financial transactions designed to hide the audit trail and provide anonymity. Integration – if the layering process succeeds, integration schemes place the laundered proceeds back into the legitimate economy in such a way that they appear to be legitimate. This “three stages model” is more often occur simultaneously or overlap depending on the facilities of the launderer, the requirements of the criminals, and on the robustness, or otherwise, of the regulatory and legal requirements. Chapter 2: Vulnerabilities of ML/TF 2.1 Introduction Criminals and terrorists succeed largely in concealing the origins or sources of their funds and sanitize the proceeds by moving them through national and international financial systems. Money laundering and the financing of terrorism have particularly significant economic and social consequences for a developing country like Bangladesh. The absence of, or a lax in AML/CFT regime in a particular country encourages criminals and terrorists to operate and expand their criminal pursuits fostering illegal activities such as corruption, drug trafficking, illicit trafficking and exploitation of human beings, arms trafficking, smuggling. 2.2 The Adverse Implications for Developing Countries The magnitude of the adverse impact of money laundering and terrorist financing cannot be quantified with the precisions. There are so many adverse effects of money laundering and terrorist financing for a developing country like Bangladesh. Some of them are describes below: 2.2.1 Increased Crime and Corruption If money laundering is prevalent in a country, it enhances crime and corruption in different ways. To the extent that a country is viewed as a safe haven for money laundering, it is likely to attract criminals and promote corruption. Safe haven includes-  weak AML/CFT framework,  little enforcement of AML/CFT provisions,  limited number of predicate offences,  limited inclusion of reporting institutions,  ineffective penalties etc. A comprehensive and effective AML/CFT framework, together with timely implementation and effective enforcement significantly reduce the profitable aspects of criminal activities and discourage criminals and terrorists. This is especially true when the proceeds from criminal activities are aggressively confiscated and forfeited as part of a country’s overall AML/CFT legal framework. 2.2.2 Non-cooperation from Foreign Counterparts Foreign financial institutions may decide to limit their transactions with institutions from money laundering havens, subject these transactions to extra scrutiny making them more expensive, or terminate correspondent or lending relationships altogether. Even legitimate businesses and enterprises from money laundering havens may suffer from reduced access to world markets or access at a higher cost due to extra scrutiny of their ownership, organization and control systems. Any country known for lax enforcement of AML/CFT is less likely to receive foreign private investment. For developing nations, eligibility for foreign governmental assistance is also likely to be severely limited. Foreign direct investment and foreign aid may be reduced or withdrawn because of lax enforcement of AML/CFT measures. Finally, the Financial Action Task Force (FATF) on Money Laundering maintains a list of countries that do not comply with AML requirements or that do not cooperate sufficiently in the fight against money laundering i.e. “non-cooperating countries and territories” (NCCT) list, gives public notice that the listed country does not have in place even minimum standards. Beyond the negative impacts referred to here, individual FATF member countries could also impose specific counter-measures against a country that does not take action to remedy its AML/CFT deficiencies. 2.2.3 Compromised Economy and Private Sector Money launderers may use front companies3 to co-mingle the illicit funds with legitimate funds in order to hide the ill-gotten proceeds, not to earn profit. Access to illicit funds let front companies to subsidize the front company’s products and services, even at belowmarket prices. As a consequence, legitimate companies find it difficult to compete with such front companies. Thus by using front companies and other investments in legitimate companies money laundering proceeds can be utilized to control whole industry or sectors of the economy of certain countries. This increases the potential for monetary and economic instability due to the misallocation of resources from artificial distortions in asset and commodity prices. It also provides a vehicle for evading taxation, thus depriving the country of revenue. 3 Business enterprises that appear legitimate and engage in legitimate business but are, in fact, controlled by criminals 2.2.4. Damaged Privatization Efforts Money launderers threaten the efforts of many countries to reform their economies through privatization. These criminal organizations are capable of outbidding legitimate purchasers of former state-owned enterprises. When illicit proceeds are invested in this manner, criminals increase their potential for more criminal activities and corruption, as well as deprive the country of what should be legitimate, market-based, taxpaying enterprise. 2.3 Vulnerabilities of Remittance Business 2.3.1. One of the main techniques commonly used at present is the conversion of large amounts of criminal proceeds in local currency into low bulk foreign currencies for physical smuggling out of the country. Some countries also evidenced the use of international money orders and mail services to send large sums of cash abroad. 2.3.2. Remittances is often used in the layering process. One of the most popular techniques is simply to transfer illicit funds through several different remittance operators to disguise the trail to the funds’ original sources. 2.3.3. Another method is to make transfers from numerous accounts to a principal collection account which is often located in offshore financial centre. 2.3.4. Transfers are also made under false identities and sometimes it becomes difficult to identify the actual recipient of the funds. 2.3.5. Remittance operators, which traditionally encompass the non-banking segment of the population, notably immigrant workers or any other person having no bank account often transfer funds to the countries where banking services are less regulated. Looking at the vulnerability of remittance service industry, the respective institutions should therefore be more vigilant to evolving money laundering and financing of terrorism threats to prevent their institutions from being abused to facilitate money laundering and financing of terrorism activities. 2.4 The Benefits of an Effective AML/CFT Framework A strong AML/CFT institutional framework that includes a broad scope of predicate offenses for money laundering helps to fight against crime and corruption. An effective AML/CFT regime is deterrent to criminal activities. In this regard, confiscation and forfeiture of money laundering proceeds impedes to earn profits from criminal activities, thereby reducing the incentive to commit criminal acts. In addition, an effective AML/CFT regime reduces the possibilities of losses to the institutions originating from fraudulent activities. Proper customer identification procedures and determination of beneficial ownership provide specific due diligence for higher risk policies and ensure monitoring for suspicious activities. Such prudential internal controls play a vital role for the safe and sound operation of a financial institution. This enhances public confidence and permits investments to be put into productive purposes that respond to consumer needs and help the productivity of the overall economy. AML and CFT Policy of AB Bank Limited ================================================================================================================================== BFIU & AML Circulars BFIU Circular- 1/2012 Dated- January 30, 2012 Regarding the formation of Bangladesh Financial Intelligence Unit in replace of AML Dept. BFIU Circular- 2/2012 Dated- March 15, 2012 Anti Money Laundering Act & Anti Terrorism (amenedment) Act 2012. AML Circular- 01/2002 Dated- May 18, 2002 Money Laundering Prevention Act - 2002 AML Circular- 02/2002 Dated- July 17, 2002 KYC, Legal Identification, Personal Information, Business Information, Transaction information, Proof of address, ETP, STR & Not to disclose the STR related information to any one, Transaction Monitoring, establishment of CCU in Head Office, CAMLCO & BAMLCO and Training & Record Keeping. AML Circular- 03/2002 Dated- December 10, 2002 - It is amendment of Circular-02. - Certificate issued by the trespectable person of the society acceptable to the Bank/FI subject to their satisfaction. AML Circular- 04/2002 Dated- December 23, 2002 Co-operation to investigate the crime related to Money Laundering. AML Circular- 05/2003 Dated- May 22, 2003 Amendment of Money Laundering Prevention Act - 2002 AML Circular- 06/2005 Dated- July 24, 2005 KYC Procedures AML Circular- 07/2005 Dated- August 14, 2005 Corresponding Banking/ Shell Banking AML Circular- 08, 09, 10 Cash Transaction Reporting Procedures] AML Circular- 11/2007 Dated- February 20, 2007 Freezing of Accounts under emergency rule - 2007 AML Circular- 12/2007 Dated- September 20, 2007 AML (amendment) ordinance – 2007. AML Circular- 13/2007 Dated- September 24, 2007 CTR threshold extended from Tk. 5.00 lac to Tk. 7.00 lac and above effective from September, 2007. AML Circular- 14/2007 Dated- September 24, 2007 - PEPs Definition : Individuals who are or have been entrusted with prominent public functions in a foreign country, for example Heads of State or of government, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials. Business relationships with family members or close associates of PEPs involve reputational risks similar to those with PEPs themselves. - Approval from HO - FATF recommendation -2012 domestic PEPs - Beneficial Owners of PEPs. AML Circular- 15/2008 Dated- March 24, 2008 Self assessment & Independent testing AML Circular- 16/2008 Dated- April 29, 2008 AML Ordinance – 2008. AML Circular- 17/2008 Dated- June 29, 2008 Anti Terrorism Ordinance - 2008 AML Circular- 18/2008 Dated- August 10, 2008 Included Insurance Company as Reporting Agency AML Circular- 19/2008 Dated- August 14, 2008 - Instruction to Bank & FIs according to AML Ordinance-2008 & Anti terrorism Ordinance-2008. - Latest STR form - CFT rsponsibilities- CCU & CAMLCO - Staff responsibility to be circulated by the Board of Directors. AML Circular- 20/2008 Dated- August 14, 2008 Instruction to Money changer according to AML Ordinance-2008 & Anti terrorism Ordinance-2008. AML Circular- 21/2009 Dated- April 21, 2009 Money Laundering Prevention Act – 2009 published in Bangladesh Gagette. AML Circular- 22/2009 Dated- April 21, 2009 Anti Terrorism Act -2009 published in Bangladesh Gagette. AML Circular- 23/2010 Dated- February 23, 2010 Completing KYC Procedures of Accounts which opened before April 30, 2002. AML Circular- 24/2010 Dated- March 03, 2010 - Definition of Customer - Beneficial owner/controller of owner - CDD (Customer due diligence), EDD - Corresponding Banking - Screening Mechanism for new recruitment - Customer awareness AML Circular- 25/2010 Dated- May 30, 2010 USD 50,000.00 or above in fav. Of Electronic Media AML Circular- 26/2010 Dated- September 30, 2010 Area of predicate offence & Reporting Agency extended/included newly. AML Circular- 27/2011 Dated- June 15, 2011 Instruction to the Non-Government Organization (NGO) and Non-Profit Organization (NPO) for compliance of AML/CFT. AML Circular- 28/2011 Dated- July 05, 2011 Guidance Notes on AML & CFT for Insurance Companies. AML Circular- 29/2011 Dated- September 27, 2011 Guidance Notes on Anti Money Laundering and Combating Financing of Terrorism for Money Changers.

GREEN BANKING IN BANGLADESH

GREEN BANKING IN BANGLADESH Complied By: Ajoy Paul, Management Trainee, AB Bank Limited 1) INTRODUCTION: Sustainable development has emerged as a new paradigm of development in response to the current discourse of development that over-exploits natural environment for economic prosperity. The sustainable development can best be achieved by allowing markets to work within an appropriate framework of cost efficient regulations and economic instruments. One of the major economic agents influencing overall industrial activity and economic growth is the financial institutions such as banking sector. The banking sector influences the economic growth and development in terms of both quality and quantity, there by changing the nature of economic growth. Banking sector is one of the major sources of financing investment for commercial projects which is one of the most important economic activities for economic growth. Therefore, banking sector can play a crucial role in promoting environmentally sustainable and socially responsible investment (SRI). Banks may not be the polluters themselves but they will probably have a banking relationship with some companies/investment projects that are polluters or could be in future. Banking sector is generally considered as environmental friendly in terms of emissions and pollutions. Internal environmental impact of the banking sector such as use of energy, paper and water are relatively low and clean. Environmental impact of banks is not physically related to their banking activities but with the customer’s activities. Therefore, environmental impact of bank’s external activity is huge though difficult to estimate. Moreover, environment management in the banking business is like risk management. It increases the enterprise value and lowers loss ratio as higher quality loan portfolio results in higher earnings. Thus, encouraging environmentally responsible investments and prudent lending should be one of the responsibilities of the banking sector. Further, those industries which have already become green and those, which are making serious attempts to grow green, should be accorded priority to lending by the banks. This method of finance can be called as “Green Banking”, an effort by the banks to make the industries grow green and in the process restore the natural environment. This concept of “Green Banking” will be mutually beneficial to the banks, industries and the conomy. Not only “Green Banking” will ensure the greening of the industries but it will also facilitate in improving the asset quality of the banks in future2. Internationally, there is a growing concern about the role of banking and institutional investors for environmentally responsible/socially responsible investment projects3. Banking and other financial institutions are more effective towards achieving this goal for the kind of intermediary role they play in any economy and for their potential reach to the number of investors. Environment is no longer the exclusive concern of the government and the direct polluters, but also the other partners and stake- holders in the business like financial institutions such as banking institutions can play a very important role in fostering linkage between economic development and environmental protection. To substantiate, quality of service, the implementation of environmental conservation measures, support to the deprived section of the society, concern about the quality of life and nature are the basic principles that the financial institutions are relying on in their business strategy in recent years. The banking operation targets a certain long-term rate of return on their credit and investment. However, every credit extension and investment caries the risk of non-payment and reduction of value (in case of direct investment) due to environmental liabilities. Therefore, it is of importance to the banking sector to follow certain environmental evaluation of the projects before financing. There are studies showing positive correlation between environmental performance and financial performance. Thus, it is imperative for the financial institutions in the present context to consider environmental performance in deciding whether to invest in companies or advise clients to do so. The formation of different rules for environmental management like resource conservation, clean water act, clean air act, toxic substance control act are also viewed as potentially significant contributor to the recent increase in environmental liability for banking institutions. Adoption of these principles will offer significant benefits to financial institutions, to consumers and also the stakeholders. There have been attempts to adopt sustainable development strategies from various quarters at international level. Multilateral agencies, international consortiums, multilateral financial and development institutions have been advocating for environmental standards and strategies to evaluate investment projects. In the recent years, the international organization for standardization (ISO) has issued series of comprehensive guidelines for incorporating environmental protection and pollution prevention objectives into industrial activity worldwide, known collectively as ISO 14000. It would certainly give the much needed impetus for the banking industry to expand the use of environmental information in their credit extension and investment decisions. 2) GREEN BANKING DEFINED: Green banking is a general term, which can cover a multitude of areas from a bank being environmentally friendly to how and also where their money is invested. Green banking, which considers all the social and environmental factors, is also called 'ethical banking'. Ethical banks started with the aim of protecting the environment. These banks are like normal banks that aim to protect the environment and are controlled by the same authorities. 3) GEEN BANK DEFINED: A green bank is a bank that promotes environmental and social responsibility but operates as a traditional community bank and provides excellent services to investors and clients. Its progressive approach to the community and the earth makes it different from the crowd. Green banking involves pursuing of financial and business policies that are not hazardous to environment rather help conserve environment. 4) WHY GREEN BANKING IN GENERAL: The broad objective of green banking is to use resources with responsibility and giving priority to environment and society. It is more about focusing on 'mother planet and its sustainability', shifting from a traditional approach on 'profit' or even 'people'. Green banking is not just another corporate social responsibility (CSR) activity; it is all about going beyond to keep this world livable without much damage. Green banking, compared to normal banking, attaches more importance to environmental factors. Its aim is to provide good environmental and social business practices. It checks all the factors before considering a loan whether the project is environment-friendly and has any implications on the future of people and planet. Basically, green banking avoids as much as paper work as possible from go-green credit cards and go-green mortgages to all transactions done online. It creates awareness around business people about environmental and social responsibility, enabling them to adopt environment friendly business practices, and follows environmental standards for lending. Overall, green banking is a good way of making people aware of global warming. Each businessman will contribute to the environment and make this earth a better place to live and enjoy. 5) WHY GREEN BANKING IN PARTICULAR: Until recently, environmental concerns were not considered relevant to the business operation of banks and financial institutions. Traditionally, banking sector’s concern for environmentally degrading activities of clients is like interfering or meddling in their business affairs. However, now it is being perceived that dealing with environment brings risks to their business. Although the banking and financial institutions are not directly affected by the environmental degradation, there are indirect costs to banks. Due to strict environmental disciplines imposed by the competent authorities across the countries, the industries would have to follow certain standards to run their business. In the case of failure, it would lead to closure of the industries leading to a likelihood of default to the bank. For example the enactment of Comprehensive Environmental Response, Compensation and Liability Act in 1980 (CERCLA) in the US in late 1980s has resulted in huge loss to the banks in the US as banks held directly responsible for the environmental pollution of their clients and made to pay the remediation cost. This is the reason for which banks in the US are ahead of other countries in integrating environmental concerns into their business operations. In the recent years several other countries (more in Europe) are seen adopting policies that have made banks responsible for the misdeeds of their clients. Therefore, the financial institutions need to engage proactively with the stakeholders on environmental and social policy issues and evaluate the impacts of their client’s investment. In turn, that would force the customers to take care of their management of environmental and social policy issues relating to investment. This should cover all project financing activities across all industries. The importance of Green Banking is immense for both the banks and economy by avoiding the following risks involved in banking sector— Credit Risk: - It can arise indirectly where banks are lending to customers whose businesses are adversely affected by the cost of cleaning up pollution or due to changes in environmental regulations. The cost of meeting new requirements on emission levels may be sufficient to put some companies out of business5. Credit risks may be higher due to the probability of customer default as a result of uncalculated expenses for capital investment in production facilities, loss of market share and third party liability claim. Credit risks are also associated with lending on the security of real estate whose value has diminished owing to environmental problems (additional loss in the event of default). Further, risk of loan default by debtors due to environmental liabilities because of fines and legal liabilities and due to reduced priority of repayment under bankruptcy. In few cases, banks have been held responsible6 for actions occurring in which they held a secured interest (see Schmidheiny and Zorraquin, 1996 and Ellis, Millians and Bodeau, 1992). Legal Risk: - It can occur in different forms. Most obviously, banks like other companies are at risk if they themselves do not comply with relevant environmental legislation. But more specifically, they are at risk of direct lender liability for clean up costs or claims for damages ifthey have actually taken possession of contaminated or pollution causing assets. An environmental management system helps a bank to reduce risks and costs, enhance its image and take advantage of revenue opportunities. Reputation Risk: - In all likelihood, due to growing awareness about environment safety, banking institutions are more prone to loose their reputations if they are involved in big projects, which are viewed as socially and environmentally damaging. There are also few cases where environmental management system has resulted in cost savings, increase in bond value etc (Heim, G et al, 2005). In few cases the environmental management system resulted in lower risk, greater environmental stewardship and increase in operating profit. Reputation risks involved in the financing of ecologically and ethically questionable projects. The adoption of green banking strategies will help the bank to deal with these risks involved in their business operation. Green banking strategies involves two components managing environment risk and (2) identifying opportunities for innovative environmentally oriented financial products (IFC, 2007). To manage environmental risk, the banks have to design proper environmental management systems to evaluate the risks involved in the investment projects. The risks can be internalized by introducing differential interest rates and other techniques. Moreover, bank can withdraw itself from financing high-risk projects. The second component of green banking entails creating financial products and services that support commercial development with environmental benefits. These includes investment in renewable energy projects, biodiversity conservation, energy efficiency, investment in cleaner production process and technologies, bonds and mutual funds meant for environmental investments etc. Thus, the banking and financial institutions should prepare an environmental risk and liability guidelines on development of protective policies and reporting for each project they finance or invest (Jeucken, 2001). They can also have an environmental assessment requirement for the projects seeking finance. Banks also can issue Environmental hazards management procedures for the each project and follow through8. International financial institutions like International Financial Corporation (IFC), Japan Bank for International Cooperation (JBIC) have incorporated environmental management into their business operation. All project proposals are classified in terms of its potential environmental impact taking into account factors such as the sector and scale of the project, the substance, proposed project site, the degree and uncertainty of its potential environmental impact. Often, the World Bank’s loans and grants are associated with certain level of commitment of the beneficiary countries to adopt environmental protection measures. The perception towards complying with environmentally norms and standards is changing over time. Adhering to environmental norms and standards were considered costly and as a bottleneck to development. If we will consider the economic benefits of these in terms of health care, productivity and insurance then the benefit is much higher than the cost9. A study confirms that only air pollution causes the loss of 200 million working days and the resulting losses in productivity and medical expenses costs around 14 billion pound to the European Union (Stavros Dimas, 2005). If all the impacts of environmental degradation are considered and costs are measured, then we can find the huge economic benefits these protection measures brings in. Environmental friendly technologies also make economic sense for the industries and actually lessen the financial burden. The cost of pollution is rising with more awareness about these issues all over the world. The polluting industries face more resistance and often forced to closedown or face massive boycott by the consumers. This adds to their cost enormously. Environmental concerns are integrated into the international trade policy and often act as trade barrier for environmentally sensitive goods (ESGs). So adopting environmentally sustainable technologies or modes of production is no more considered as a financial burden, rather it brings new business opportunities and higher profit. Green banking saves costs, minimizes the risk, enhance banks reputations and contribute to the common good of environmental sustainability. So it serves both the commercial objective of the bank as well as its social responsibility. Green banking solves the problem faced by the environmental regulation and enforcements authorities related to size and location of the polluting unit. The authorities have practical limitations on enforcing environment standard on small-scale industries and also industries located in far off places. 6) POLICY OF THE GOVERNMENT AND CENTRAL BANK REGARDING IMPLEMENTATION OF GREEN BANKING: The Bangladesh Bank vide their BRPD Circular No. 02 dated 27-02-2011 has given directions to all scheduled banks to take necessary initiatives for implementation of Green Banking Policy in their business with the view to ensure necessary measures to protect environmental pollution while financing a new project or providing working capital to the existing enterprises. Banks have been advised to facilitate their clients with utmost care in opening Letter of Credit (L/C) for installation of Effluent Treatment Plant(ETP) in the industrial units. Banks have been advised to finance in Solar Energy, Bio-gas, ETP and Hybrid Hoffman Kiln (HHK) in brick field under refinance program of Bangladesh Bank. Considering the adverse effects of Climate Change, banks have been advised to be cautious about the adverse impact of natural calamities and encourage the farmers to cultivate salinity resistant crops in the salty areas, water resistant crops in the water locked and flood prone areas, drought resistant crops in the drought prone areas, using surface water instead of underground water for irrigation and also using organic fertilizer, insecticides by natural means instead of using chemical fertilizer and pesticides. Strategy for adopting Green Banking Policy: Bangladesh Bank has formulated a vigorous policy for all scheduled Banks which will ensure complete implementation of the policy within a stipulated time. In this regard, Bangladesh Bank has structured following 03 (three) phases: FIRST PHASE: In this phase, banks must accomplish the following works within December 31, 2011: •Policy Formulation and Governance Bank shall formulate and adopt broad environmental or Green Banking policy and strategy approved by their Board of Directors. A high powered Committee comprises of directors from the Board in case of scheduled Bangladeshi Banks and a high powered committee comprises Regional Chief of Global Office and members from the top management including CEO in case of Foreign Banks should be responsible for reviewing the banks environmental policies, strategies and program. Bank shall approve a considerable fund in their annual budget allocation for green banking. Banks are required to establish a separate Green Banking Unit or Cell having the responsibility of designing, evaluating and administering related green banking issues of the bank. A senior executive should be assigned with the responsibility of heading the unit. The unit will report to the high powered committee time to time. •Environmental Risk in CRM Banks shall comply with the instructions stipulated in the detailed guidelines on Environmental Risk Management (ERM) in consideration of a part of the Green Banking Policy. Bank shall incorporate Environmental and Climate Change Risk as part of the existing credit risk methodology prescribed to assess a prospective borrower. This will include integrating environmental risks in the checklists, audit guidelines and reporting formats. •In-house Environment Management Banks shall prepare an inventory of the consumption of water, paper, electricity, energy etc. by its offices and branches in different places. Then it should take measures to save electricity, water and paper consumption. A 'Green Office Guide' or at least a set of general instructions should be circulated to the employees for efficient use of electricity, water, paper and reuse of equipments. In place of relying on printed documents, online communication should be extensively used (where possible) for office management and make sure that the printers are defaulted to duplex for double-side printing to save papers. • Green finance Eco friendly business activities and energy efficient industries will be given preference in financing by bank. Environmental infrastructure such as renewable energy project, clean water supply project, wastewater treatment plant, solid & hazardous waste disposal plant, bio-gas plant, bio-fertilizer plant should be encouraged and financed by bank. Consumer loan programs may be applied for promoting environmental practices among clients. •Creation of Climate Risk Fund Bank should finance the economic activities of the flood, cyclone and drought prone areas at the regular interest rate without charging additional risk premium. However, banks should assess their environmental risks for financing the sectors in different areas for creating a Climate Change Risk Fund. This will be used in case of emergency. The bank would ensure regular financing flows in these vulnerable areas and sectors. The fund could be created as part of banks’ CSR expenses. •Introducing Green Marketing Green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. It refers to the process of selling products and/or services based on their environmental benefits. Banks should use environmental causes for marketing their services to consumer. Green marketing is expected to help awareness development among common people. • Online Banking Banks should give more emphasis to make the easiest way to help environment by eliminating paper waste, saving gas and carbon emission, reducing printing costs and postage expenses. Online banking is the practice of making bank transactions or paying bills via the Internet on a secure website of the respective bank that allows the customers to make deposits, withdrawals and pay bills. -Employee Training, Consumer Awareness and Green Event Employee awareness development and training on environmental and social risk and the relevant issues should be a continuous process as part of the bank's Human Recourse Development. Awareness development among consumers and clients would be a continuous job of a bank under its public relation department. SECOND PHASE: In this phase, all scheduled banks are advised to accomplish the following works within December 31, 2012: • Sector Specific Environmental Policies Banks need to formulate strategies to design specific policies for different environmental sensitive sectors such as Agriculture, Agri-business (Poultry & Dairy), Agro farming, Leather(Tannery), Fisheries, Textile and Apparels, Renewable Energy, Pulp and Paper, Sugar and distilleries, Construction and Housing, Engineering and Basic Metal, Chemicals (Fertilizers, Pesticides and Pharmaceuticals), Rubber and Plastic Industry, Hospital/Clinic, Chemical Trading, Brick Manufacturing, Ship breaking etc. •Green Strategic Planning A bank should determine green targets to be attained through strategic planning. Bank should determine a set of achievable targets and strategies, and disclose these in their annual reports and websites for green financing and in-house environment anagement as well. •Setting up Green Branches A Green Branch should be featured by the provision of the maximum use of natural light, use of renewable energy, use of energy saving bulbs and other equipments, reduced water and electricity use, use of recycled water etc. Such a branch of a bank would be specifically designated as a ‘Green Branch’. A Green Branch will be entitled to display a special logo approved by Bangladesh Bank. The criteria for certification of a ‘Green Branch’ will be circulated by Bangladesh Bank in due course of time. • Formulation of Bank Specific Environmental Risk Management Plan and Guidelines: Banks should develop and follow an environmental risk management manual or guidelines in their assessment and monitoring of project and working capital loans. In addition to the compliance of national regulation the bank may set internationally accepted higher environmental standards. In this connection, Green initiatives by a group of banks will not only be effective but will also offer competitive advantage. Bank alliances may prepare standard and guidelines for themselves for improving Green Banking practices. • Programs to Educate Clients: Clients and business houses should be encouraged and influenced to comply with the environmental regulations and undertake resource efficient and environmental activities. Banks should introduce rigorous programs to educate clients. THIRD PHASE: In this phase, all scheduled banks are advised to accomplish the following works within December 31, 2013: •Designing and Introducing Innovative Products Alongside avoiding negative impacts on environment through banking activities, banks are expected to introduce environment friendly innovative green products to address the core environmental challenges of the country. •Reporting in Standard Format with External Verification Banks should publish independent Green Annual Report following internationally accepted format like Global Reporting Initiatives (GRI) targeting their stakeholders. There should be arrangement for verification of these publications by an independent agency or acceptable third party. •Reporting on Green Banking Banks shall report their initiatives/activities under the said program to the Department of Off-site Supervision of Bangladesh Bank on quarterly basis. Banks shall submit their first quarterly report on June 30, 2011 basis within July 15, 2011 and similarly they will be required to continue to submit reports on the subsequent quarters within the next 15 days of the respective quarter end. 7) MOTIVATIONAL FACTORS FOR IMPLEMENTATION OF GREEN BANKING POLICY: One would be awarded a loan only when all environmental safety standards are followed. When a person is awarded a loan, the interest is less than normal banks because ethical banks give more importance to environment-friendly factors, they do not operate with high interest rates only. Beside this, Bangladesh Bank has declared the following privileges for complete implementation of Green Banking Policy: (i) BB will award points to banks on Management component while computing CAMELS rating where there will ultimately be a positive impact on overall rating of a bank. (ii) BB will declare the names of the Top Ten Banks for their overall performance in green banking activities in the BB websites. (iii) BB will actively consider green banking activities/practices of a bank while according permission for opening new bank branch. 8) GREEN BANKING: INTERNATIONAL INITIATIVES: The financial sector’s growing adherence to environmental management system is attributed to the direct and indirect pressures from international and local Non-Governmental Organisations (NGOs), multilateral agencies and in some cases the market through consumers. In the early 1990s, the United Nations Environment Programme (UNEP) launched what is now known as the UNEP Finance Initiative (UNEPFI). Some 200 financial institutions around the globe are signatories of this initiative statement to promote sustainable development within the framework of market mechanisms toward common environmental goals. The objective is to integrate the environmental and social dimension to the financial performance and risk associated with it in the financial sector. As the commitment of this UNEPFI statement goes, sustainable development is regarded basic to the sound business management. It advocates for a precautionary approach towards environmental management and suggests integrating environmental considerations into the regular business operations, asset management, and other business decisions of the banks. IFC’s environmental unit was established in 1991 for reviewing each project for environmental assessment. Similarly, the US Export-Import Bank regularly reviews while financing exports on the ground whether they are environmentally sound. It will be noteworthy to mention that Netherland-based ABN-Amro bank has developed certain Reputational Risk Management (RRM) policies to identify, asses and mange nonfinancial present within it business engagements. Similarly, some of the big international banks like ABN Amro, Deutsche, Standard Chartered, HSBC Bank etc. look at environment issues discussed under Kyoto Protocol. Going further, the Dutch Government has made a formal request to banks in achieving sustainable development. The dialogue between banks and government was established in 1999 to initiate policies for environmental improvements through the development of new financial products and services. Similalrly, Earth (FoE) and the Rainforest Action Network (RAN) challenged the industry with high-profile campaign that highlighted cases in which commercial banks were “bankrolling disasters” in 2000 in the US. In 2002, a global coalition of NGOs formed a network named ‘BankTract’ to promote sustainable finance in the commercial sector. This coalition came up with a resolution constituting six principles promoting environmental protection and social justice by banks and this is popularly known as Collevecchio Declaration. The six principles that this declaration advocated included commitments to sustainability, no-harm, responsibility, accountability, transparency and sustainable market, and governance. More than 200 organizations have endorsed this declaration and urged the banks to incorporate these commitments into their business operation. The declaration states that “Finance and Commerce has been at the center of a historic detachment between the world’s natural resource base, production and consumption. As we reach the boundaries of ecological boundaries of the ecological limit upon which all commerce relies, the financial sector should take its share of responsibility for reversing the effects this detachment has produced”. All these concerns for sustainable finance or green finance have compelled the banking institutions to devise a common and coherent set of environmental and social policies and guidelines that can be used to evaluate the projects. A small group of banks along with IFC came together to initiate the process of designing the common guidelines in October 2002 and came up with a guidelines in June 2003 that is known as Equator Principles with 10 leading commercial banks adopting these voluntary set of principles. This equator principle was subsequently 10 updated and the new revised sets of principles are launched in July 2006. The coverage of projects being financed are expanded in this revised set of principles by lowering the finance threshold from $50 million to $10 million. Presently 46 financial institutions from 16 countries with business operation in more than 100 countries have embraced this equator principle. So this principle has become a common standard of project finance that incorporated environmental and social issues in project finance. The activities of the equator banks (banks adopting equator principles) are being reviewed by NGOs worldwide and are being published whenever it is realized that they are not committed to Equator Principle. IFC along with the Financial Times has initiated ‘Sustainable Banking Award’ since 2006. More than 104 financial institutions out of 151 entries from 51 countries have made it to the final lists of award in 2007. The number of banks applying was up by more than 100 per cent compared to the previous year's 48 banks from 28 countries. All the international initiatives towards integrating environmental concerns into business operation of banks are voluntary in nature and are meant to promote a common good of a better ecosystem. Voluntary commitment has its own shortcoming in a competitive market. Unless the market for green money will increase, the lenders will always have an incentive to procrastinate their social commitment and prioritize the commercial interest in the short run. So demand for green money is a precondition of green banking if it will be voluntary. A Government legislation that makes banks accountable for the misdeeds of their clients will help promote green banking. The Indian government has been trying to address the issue of environemental pollution by framing environmental legislations and encouraging industry to follow environmental technologies and practices. The environmental regulations in India can be broadly classified into two broad categories i.e. command and control regulations and liability law. The command and control regulations are ex ante regulations that are designed to dissuade environmentally damaging projects. This regulation is implemented by setting industry specific pollution standards, scrutinizing the projects and granting/denying permissions by the concerned authorities like Ministry of Environment and Forest. The liability laws are ex post in nature and are implemented by enforcing authorities through imposing fines, closing down the defaulting industries etc. However there is no law and rule in India that can hold banks responsible for scrutinizing investment projects before financing and for the environmental damage created by its client. Once legal framework for the environmental pollution standards are formulated in India, the polluting industries either have to close down or have to make necessary investment to comply with the standard. In this process these industries will loose their competitiveness in the international market, which would directly affect Indian economy and the banking sector. Thus in the present context, it is equally important for banks to guard themselves against the conversion of the now performing assets into non-performing one in the future. Realization of these facts by banks will certainty make them fast adopt the concept of Green Banking. The industries, which are ill equipped to control pollution now, are the possible polluters of future. A day may come, when legislation may take a hard stance against these environmental culprits and may order the closer of these units. Almost 150 SSI units around Agra and Delhi were forced to close down for their non-compliance to the mandated environmental standards. In such an eventuality, the industries cannot be rescued from becoming the non-performing ones, as the banking institutions continue to overlook these aspects. 9) GREEN BANKING:BANGLADESH INITIATIVES: It is observed that there is a growing awareness among banks and financial institutions to protect the environment and thereby save 'mother planet'. Big banks are committing large funds on a sustainable basis in responsible banking, creating more values for our next generation. They are shifting forward from 'profit' to 'people' and now more importantly, to create a better future for all. The sooner this philosophy of 'green banking' is embraced, the better it is for all. All scheduled banks have already taken initiative to implement Green Banking Policy in their operation and business. Amongst 04 (fourty eight) scheduled banks in Bangladesh following banks have started their operation in this regard with the refinance policy of Bangladesh Bank: 1. Prime Bank Limited 2. Mercantile Bank Limited 3. Mutual Trust Bank Limited 4. Trust Bank Limited 5. National Bank Limited Al-Arafah Islami Bank Limited has also started their Green Banking operation but they are not taking re-finance due to their Islami Banking Policy. 10) BANKERS’ ROLE IN IMPLEMENTING GREEN BANKING: Now a days, most of the commercial lending process in different parts of the world scrutinizes projects with a set of tools by incorporating environmental concerns in their day-today business14. The financial institutions should encourage projects which take care of following points while financing them viz., (a) sustainable development and use of natural renewable natural resources (b) protection of human health, bio-diversity, occupational health and safety, efficient production, delivery and use of energy (c) pollution prevention and waste minimization, pollution controls (liquid effluents and air emissions) and solid and chemical waste management and (d) there should be a third party expert to draw a plan for the environment management plan. They should keep following aspects in mind while financing any projects— 1. Analyzing the project in terms of scale, nature and the magnitude of environmental impact. The project should be evaluated on the basis of potential negative and positive environmental effects and then compared with the ‘without project situation’. There should be an Environmental Impact Assessment (EIA) of each project recommending the measures needed to prevent, minimize and mitigate the environmental negative impact before financing the projects. 2. While investing or funding the projects, the financial institutions should assess the sensitive issues like vulnerable groups; involuntary displacement etc and projects should be evaluated in terms of environmentally important areas including wetlands, forests, grasslands and other natural habitats. 3. Banking institutions need to evaluate the value of real property and the potential environmental liability associated with the real property. Therefore, the banks should have right to inspect the property or to have an environmental audit performed through the life of the loan. 4. Banks also need to monitor post transaction for the ideal environmental risk management program (Rutherford, 1994) during the project implementation and operation. There should be physical inspections of production, resources, training and support, environmental liability, audit programs etc 5. The next round of evaluation includes loan structuring, credit approval, credit review and loan management. Further banks have annual audits, quarterly environmental compliance certificate from the independent third party and also from the government. Further the banks can introduce green bank loans and products like (i) investing in environmental projects (recycling, farming, technology, waste, etc) for example reduced-rate of interest on loans to homeowners who install a solar energy system (ii) providing option for customers to invest in environmentally friendly banking products (iii) investing in resources that combine ecological concerns and social concerns. 11) CONCLUSION: In a rapidly changing market economy where globalization of markets has intensified the competition, the industries and firms are vulnerable to stringent public policies, severe law suits or consumer boycotts. This would affect the banks and financial institutions to recover their return from investment. Thus, the banks should play a pro-active role to take environmental and ecological aspects as part of their lending principle which would force industries to go for mandated investment for environmental management, use of appropriate technologies and management systems. Green Banking if implemented sincerely will act as an effective ex ante deterrent for the polluting industries that give a pass by to the other institutional regulatory mechanisms. The banking and financial sector should be made to work for sustainable development. It is time we took decisive steps to gradually adhere to green banking guidelines that use environment-sensitive parameters, apart from financial, to fund projects. ***

The Banking System of Bangladesh: An Overview

The Banking System of Bangladesh The banking system at independence consisted of two branch offices of the former State Bank of Pakistan and seventeen large commercial banks, two of which were controlled by Bangladeshi interests and three by foreigners other than West Pakistanis. There were fourteen smaller commercial banks. Virtually all banking services were concentrated in urban areas. The newly independent government immediately designated the Dhaka branch of the State Bank of Pakistan as the central bank and renamed it the Bangladesh Bank. The bank was responsible for regulating currency, controlling credit and monetary policy, and administering exchange control and the official foreign exchange reserves. The Bangladesh government initially nationalized the entire domestic banking system and proceeded to reorganize and rename the various banks. Foreign-owned banks were permitted to continue doing business in Bangladesh. The insurance business was also nationalized and became a source of potential investment funds. Cooperative credit systems and postal savings offices handled service to small individual and rural accounts. The new banking system succeeded in establishing reasonably efficient procedures for managing credit and foreign exchange. The primary function of the credit system throughout the 1970s was to finance trade and the public sector, which together absorbed 75 percent of total advances. The government's encouragement during the late 1970s and early 1980s of agricultural development and private industry brought changes in lending strategies. Managed by the Bangladesh Krishi Bank, a specialized agricultural banking institution, lending to farmers and fishermen dramatically expanded. The number of rural bank branches doubled between 1977 and 1985, to more than 3,330. Denationalization and private industrial growth led the Bangladesh Bank and the World Bank to focus their lending on the emerging private manufacturing sector. Scheduled bank advances to private agriculture, as a percentage of sectoral GDP, rose from 2 percent in FY 1979 to 11 percent in FY 1987, while advances to private manufacturing rose from 13 percent to 53 percent. The transformation of finance priorities has brought with it problems in administration. No sound project-appraisal system was in place to identify viable borrowers and projects. Lending institutions did not have adequate autonomy to choose borrowers and projects and were often instructed by the political authorities. In addition, the incentive system for the banks stressed disbursements rather than recoveries, and the accounting and debt collection systems were inadequate to deal with the problems of loan recovery. It became more common for borrowers to default on loans than to repay them; the lending system was simply disbursing grant assistance to private individuals who qualified for loans more for political than for economic reasons. The rate of recovery on agricultural loans was only 27 percent in FY 1986, and the rate on industrial loans was even worse. As a result of this poor showing, major donors applied pressure to induce the government and banks to take firmer action to strengthen internal bank management and credit discipline. As a consequence, recovery rates began to improve in 1987. The National Commission on Money, Credit, and Banking recommended broad structural changes in Bangladesh's system of financial intermediation early in 1987, many of which were built into a three-year compensatory financing facility signed by Bangladesh with the IMF in February 1987. One major exception to the management problems of Bangladeshi banks was the Grameen Bank, begun as a government project in 1976 and established in 1983 as an independent bank. In the late 1980s, the bank continued to provide financial resources to the poor on reasonable terms and to generate productive self-employment without external assistance. Its customers were landless persons who took small loans for all types of economic activities, including housing. About 70 percent of the borrowers were women, who were otherwise not much represented in institutional finance. Collective rural enterprises also could borrow from the Grameen Bank for investments in tube wells, rice and oil mills, and power looms and for leasing land for joint cultivation. The average loan by the Grameen Bank in the mid-1980s was around Tk2,000 (US$65), and the maximum was just Tk18,000 (for construction of a tin-roof house). Repayment terms were 4 percent for rural housing and 8.5 percent for normal lending operations. The Grameen Bank extended collateral-free loans to 200,000 landless people in its first 10 years. Most of its customers had never dealt with formal lending institutions before. The most remarkable accomplishment was the phenomenal recovery rate; amid the prevailing pattern of bad debts throughout the Bangladeshi banking system, only 4 percent of Grameen Bank loans were overdue. The bank had from the outset applied a specialized system of intensive credit supervision that set it apart from others. Its success, though still on a rather small scale, provided hope that it could continue to grow and that it could be replicated or adapted to other development-related priorities. The Grameen Bank was expanding rapidly, planning to have 500 branches throughout the country by the late 1980s. Beginning in late 1985, the government pursued a tight monetary policy aimed at limiting the growth of domestic private credit and government borrowing from the banking system. The policy was largely successful in reducing the growth of the money supply and total domestic credit. Net credit to the government actually declined in FY 1986. The problem of credit recovery remained a threat to monetary stability, responsible for serious resource misallocation and harsh inequities. Although the government had begun effective measures to improve financial discipline, the draconian contraction of credit availability contained the risk of inadvertently discouraging new economic activity. Foreign exchange reserves at the end of FY 1986 were US$476 million, equivalent to slightly more than 2 months worth of imports. This represented a 20-percent increase of reserves over the previous year, largely the result of higher remittances by Bangladeshi workers abroad. The country also reduced imports by about 10 percent to US$2.4 billion. Because of Bangladesh's status as a least developed country receiving concessional loans, private creditors accounted for only about 6 percent of outstanding public debt. The external public debt was US$6.4 billion, and annual debt service payments were US$467 million at the end of FY 1986. Banking in Bangladesh The financial system of Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4 State Owned Commercial Banks (SCB), 5 government owned specialized banks, 30 domestic private banks, 9 foreign banks and 29 non-bank financial institutions. Moreover, MRA has given license to 298 Micro-credit Organizations. The financial system also embraces insurance companies, stock exchanges and co-operative banks. Central Bank and its policies Bangladesh Bank (BB), as the central bank, has legal authority to supervise and regulate all banks and non-bank financial institutions. It performs the traditional central banking roles of note issuance and of being the banker to the government and banks. Given some broad policy goals and objectives, it formulates and implements monetary policy, manages foreign exchange reserves and lays down prudential regulations and conduct monitoring thereof as they apply to the entire banking system. Its prudential regulations include, among others: minimum capital requirements, limits on loan concentration and insider borrowing and guidelines for asset classification and income recognition. The Bangladesh Bank has the power to impose penalties for non-compliance and also to intervene in the management of a bank if serious problem arise. It also has the delegated authority of issuing policy directives regarding the foreign exchange regime. Monetary Policy Monetary policy is a set of rules that aims at regulating the supply of money in accordance with predetermined goals or objectives. Monetary policy plays a very dominant role in altering the economic activity and the price level in a country. So, it should be very carefully formulated and implemented in achieving the goals and objectives as outlined in the Bangladesh Bank Order, 1972 below: • Price stability both internal & external • Sustainable growth & development • High employment • Economic and efficient use of resources • Stability of financial & payment system Reserve Management Strategy Bangladesh Bank (BB) is empowered by section 7A of Bangladesh Bank Order, 1972 (President’s Order No. 127 of 1972) to hold and manage the official foreign exchange reserve of Bangladesh . It maintains its foreign exchange reserve in different currencies to minimize the risk emerging from widespread fluctuation in exchange rate of major currencies and very irregular movement in interest rates in the global money market. BB has established Nostro account arrangements with different Central Banks. Funds accumulated in these accounts are invested in Treasury bills, repos and other government papers in the respective currencies. It also makes investment in the form of short term deposits with different high rated and reputed commercial banks and purchase of high rated sovereign/supranational/corporate bonds. Forex Reserve & Treasury Management Department of BB performs the operational functions regarding investment which is guided by investment policy set by the BB’s Investment Committee headed by a Deputy Governor. The underlying principle of the investment policy is to ensure the optimum return on investment with minimum market risk. Exchange Rate Policy Towards liberalization of foreign exchange transactions, a number of measures were adopted since 1990s. Bangladeshi currency, the taka, was declared convertible on current account transactions (as on 24 March 1994), in terms of Article VIII of IMF Article of Agreement (1994). As Taka is not convertible in capital account, resident owned capital is not freely transferable abroad. Bangladesh adopted Floating Exchange Rate regime since 31 May 2003. Under the regime, BB does not interfere in the determination of exchange rate, but operates the monetary policy prudently for minimizing extreme swings in exchange rate to avoid adverse repercussion on the domestic economy. In the forex market banks are free to buy and sale foreign currency in the spot and also in the forward markets. Interest Rate Policy Under the Financial sector reform program, banks are free to charge/fix their deposit (Bank /Financial Institutes) and Lending (Bank /Financial Institutes) rates other than Export Credit. At present, Loans at reduced rates (7%) are provided for all sorts of export credit since January 2004. With a view to controlling the price hike and ensuring adequate supply of essential commodities, the rate of interest on loan for import financing of rice, wheat, sugar, edible oil (crude and refined), chickpeas, beans, lentils, onions, spices , dates and powder milk has been temporarily fixed to a maximum of 12%. Now, banks can differentiate interest rate up to 3% considering comparative risk elements involved among borrowers in same lending category. With progressive deregulation of interest rates, banks have been advised to announce the mid-rate of the limit (if any) for different sectors and the banks may change interest 1.5% more or less than the announced mid-rate on the basis of the comparative credit risk. Recently Banks have been advised to upload their deposit and lending interest rate in their respective website. Capital Adequacy of the Banks With a view to strengthening the capital base of banks and making them prepare for the implementation of Basel-II Accord, banks are required to maintain Capital to Risk-Weighted Assets ratio 10% at the minimum with core capital not less than 5% effective from December 31, 2007. However, minimum capital requirement (paid up capital and statutory reserve) for all banks will be Tk.200 crore as per Bank Company (Amendment) Ordinance, 2007. Banks having capital shortfall will have to meet at least 50% of the shortfall by June, 2008 and the rest by June, 2009. Revaluation reserves of held to maturity (HTM) securities (up to 50% of the revaluation reserves) has been added to the components of supplementary capital. Besides, 'Hedging the price risk of commodity transactions' has been included in Short-term self liquidating trade related contingencies. Loan Classification and Provisioning In order to strengthen credit discipline and bring classification and provisioning regulation in line with international standard, Bangladesh Bank issued a master circular on loan classification and provisioning through BRPD circular no 5 dated June 5, 2006. The revised policy covers an independent assessment of each loan on the basis of objective criteria and qualitative factors which is appended below : Any Continuous Loan/Demand Loan if not repaid/renewed within the fixed expiry date for repayment will be treated as past due/overdue from the following day of the expiry date. A Continuous Loan/Demand loan/Term Loan which will remain overdue for a period of 90 days or more, will be put into the "Special Mention Account(SMA)". Interest accrued on "Special Mention Account (SMA)" will be credited to Interest Suspense Account, instead of crediting the same to Income Account. A Continuous Loan/Demand loan is classified as 'Sub-standard' if it is past due/over due for 6 months or beyond but less than 9 months, classified as`Doubtful' if it is past due/over due for 9 months or beyond but less than 12 months and classified as `Bad/Loss' if it is past due/over due for 12 months or beyond. If any installment(s) or part of installment(s) of a Fixed Term Loan is not repaid within the due date, the amount of unpaid installment(s) will be termed as `defaulted installment'. In case of Fixed Term Loans, which are repayable within maximum five years of time- If the amount of 'defaulted installment' is equal to or more than the amount of installment(s) due within 6 (six) months, the entire loan will be classified as "Sub-standard", if the amount is equal to or more than the amount of installment(s) due within 12 (twelve) months, the entire loan will be classified as"Doubtful" and if the amount is equal to or more than the amount of installment(s) due within 18 (eighteen) months, the entire loan will be classified as "Bad/Loss". In case of Fixed Term Loans, which are repayable in more than five years of time and if the amount of 'defaulted installment' is equal to or more than the amount of installment(s) due within 12 (twelve) months, the entire loan will be classified as"Sub-standard". If the amount is due within 18 (eighteen) months, the entire loan will be classified as "Doubtful" and if the amount is due within 24 (twenty four) months, the entire loan will be classified as "Bad/Loss". The Short-term Agricultural and Micro-Credit will be considered irregular if not repaid within the due date as stipulated in the loan agreement. If the said irregular status continues, the credit will be classified as 'Substandard ' after a period of 12 months, as 'Doubtful' after a period of 36 months and as 'Bad/Loss' after a period of 60 months from the stipulated due date as per loan agreement. Besides, if any situational changes occur in the stipulations in terms of which the loan was extended or if the capital of the borrower is impaired due to adverse conditions or if the value of the securities decreases or if the recovery of the loan becomes uncertain due to any other unfavourable situation, the loan will have to be classified on the basis of qualitative judgement. As regards the provision, banks are required to maintain General Provision against all categories of loans along with off-balance sheet items in the following manner: Particulars Short Term Agri. Credit and micro credit Consumer Financing Small Enterprise Financing All other Credit Other than Housing Finance & Loans for Professionals to set up business Housing Finance Loans for Professionals to set up business UC Standard 5% 5% 2% 2% 1% 1% SMA - 5% 5% 5% 5% 5% Classified SS 5% 20% 20% 20% 20% 20% DF 5% 50% 50% 50% 50% 50% B/L 100% 100% 100% 100% 100% 100% Besides, banks are required to maintain general provision against Off-balance sheet exposures in the following manner: (i) @ 0.5% provision effective from December 31, 2007 and (ii) @ 1% provision effective from December 31, 2008. Other instructions such as Eligible securities in determining base for provision along with a revised format for submitting the report on classification of loans and advances are also provided in the respective circulars. Deposit and Insurance: The deposit insurance scheme (DIS) was introduced in Bangladesh in August 1984 to act as a safety net for the depositors aiming at minimizing the risks of loss of depositors' fund with banks in which all the commercial banks including foreign banks and the specialized banks operating in Bangladesh are the member of this scheme by compulsion as provided under Article of Bank Deposit Insurance Act 2000. The DIS is designed to minimize the risks that the depositors suffer a loss out of placing funds with a bank. The purpose of DIS is to help to increase market discipline, reduce moral hazard in the financial sector and provide safety nets at the minimum cost to the public in the event of bank failure. The direct rationale for the deposit insurance is customer protection. The indirect rationale for deposit insurance is that it reduces the risks of systemic crisis, involving, for example, panic withdrawals of deposits from sound banks and breakdown of payments system. A Deposit Insurance Trust Fund (DITF) has also been created for providing limited protection (not exceeding Taka 0.01 million) to a small depositor in case of winding up of any bank. The Board of Directors of Bangladesh Bank is the Trustee Board for the DITF. Bangladesh bank has adopted a system of risk based deposit insurance premium rates applicable for all scheduled banks effective from the half year January - June 2007. According to new instruction regarding premium rates, problem banks are required to pay 0.09 percent and private banks other than the problem banks and state owned commercial banks are required to pay 0.07 percent where the percent coverage of the deposits is taka one hundred thousand per depositor per bank. With this end in view, BB has already advised the banks for bringing DIS into the notice of the public through displaying the same in their display board. Foreign Exchange System On March 24, 1994 Bangladesh Taka (domestic currency) was declared convertible for current transactions in terms of Article VIII of the IMF Articles of Agreement. Consequent to this, current external settlements for trade in goods and services and for amortization payments on foreign borrowings can be made through banks authorized to deal in foreign exchange, without prior central bank authorization. However, because resident owned capital is not freely transferable abroad (Taka is not yet convertible on capital account), some current settlements beyond certain indicative limits are subject to bonafides checks. Direct investments of non-residents in the industrial sector and portfolio investments of non-residents through stock exchanges are repatriable abroad, as also are capital gains and profits/dividends thereon. Investment abroad of resident-owned capital is subject to prior Bangladesh Bank approval, which is allowed only sparingly. Bank Licensing Bank Company Act, 1991, empowers BB to issue licenses to carry out banking business in Bangladesh . Pursuant to section 31 of the Act, before granting a license, BB needs to be satisfied that the following conditions are fulfilled: "that the company is or will be in a position to pay its present or future depositors in full as their claims accrue; that the affairs of the company are not being or are not likely to be conducted in a manner detrimental to the interest of its present and future depositors; that, in the case of a company incorporated outside Bangladesh, the Government or law of the country in which it is incorporated Bangladesh as the Government or law of Bangladesh grants to banking companies incorporated outside Bangladesh and that the company complies with all applicable provisions of Bank Companies Act, 1991." Licenses may be cancelled if the bank fails to comply with above provisions or ceases to carry on banking business in Bangladesh . Commercial Banks The commercial banking system dominates the financial sector with limited role of Non-Bank Financial Institutions and the capital market. The Banking sector alone accounts for a substantial share of assets of the financial system. The banking system is dominated by the 4 State Owned Commercial Banks, which together controlle more than 30% of deposits and operates 3383 branches (50% of the total) as of June 30, 2008. Specialized Banks Out of the 5 specialized banks, 2(Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) were created to meet the credit need of the agricultural sector while the other two (Bangladesh Shilpa Bank(BSB) & Bangladesh Shilpa Rin Sangtha(BSRS) ) are for extending term loans to the industrial sector of Bangladesh . Financial Institutions (FIs) Twenty-nine financial institutions are now operating in Bangladesh . Of these institutions, 1(one) is govt. owned, 15 (fifteen) are local (private) and the other 13(thirteen) are established under joint venture with foreign participation. The total amount of loan & lease of these institutions is Tk.99,091.80 million as on 31 December, 2007. Bangladesh Bank has introduced a policy for loan & lease classification and provisioning for FIs from December 2000 on half-yearly basis. To enable the financial institutions to mobilize medium and long-term resources, Government of Bangladesh (GOB) signed a project loan with IDA, and a project known as ``Financial Institutions Development Project (FIDP)`` has started its operation from February 2000. Bangladesh Bank is administering the project. The project has established ``Credit, Bridge and Standby Facility (CBSF)`` to implement the financing program with a cost of US$ 57.00 million. CAPITAL MARKET The Capital market, an important ingredient of the financial system, plays a significant role in the economy of the country. 1. Regulatory Bodies The Securities and Exchange Commission exercises powers under the Securities and Exchange Commission Act 1993. It regulates institutions engaged in capital market activities. Bangladesh Bank exercises powers under the Financial Institutions Act 1993 and regulates institutions engaged in financing activities including leasing companies and venture capital companies. 2. Participants in the Capital Market The SEC has issued licences to 27 institutions to act in the capital market. Of these, 19 institutions are Merchant Banker & Portfolio Manager while 7 are Issue Managers and 1(one) acts as Issue Manager and Underwriter. i) Stock Exchanges There are two stock exchanges ( the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) ) which deal in the secondary capital market. DSE was established as a public Limited Company in April 1954 while CSE in April 1995. As of 30 June 2000 the total number of enlisted securities with DSE and CSE were 239 and 169 respectively. Out of 239 listed securities with the DSE, 219 were listed companies, 10 mutual funds and 10 debentures. ii) Investment Corporation of Bangladesh (ICB) The Investment Corporation of Bangladesh was established in 1976 with the objective of encouraging and broadening the base of industrial investment. ICB underwrites issues of securities, provides substantial bridge financing programmes, and maintains investment accounts, floats and manages closed-end & open-end mutual funds & closed-end unit funds to ensure supply of securities as well as generate demand for securities. ICB also operates in the DSE and CSE as dealers. iii) Specialized Banks Bangladesh Shilpa Bank (BSB), Bangladesh Shilpa Rin Sangstha (BSRS), BASIC Bank Ltd., some Foreign Banks and NCBs are engaged in long term industrial financing. INSURANCE The insurance Sector is regulated by the Insurance Act, 1938 with regulatory oversight provided by the controller of Insurance on authority under the ministry of commerce. General insurance is provided by 21 companies and life insurance is provided by 6 companies. The industry is dominated by the two large, state-owned companies--SBC for general insurance and JBC for life insurance--which together command most of the total assets of the insurance sector. MICROFINANCE INSTITUTIONS (MFIs) The member-based Microfinance Institutions (MFIs) constitute a rapidly growing segment of the Rural Financial Market (RFM) in Bangladesh . Microcredit programs (MCP) in Bangladesh are implemented by various formal financial institutions (nationalized commercial banks and specialized banks), specialized government organizations and Non-Government Organizations (NGOs). The growth in the MFI sector, in terms of the number of MFI as well as total membership, was phenomenal during the 1990s and continues till today. Over the period of June 2003 to June 2006 the growth rate was over 70% in terms of horizontal expansion of microcredit borrower. The total coverage of MCP in Bangladesh is approximately 30.09 million borrowers without considering overlapping figures. Table-1 shows the coverage of major institutions in the formal and semi-formal sectors. Table - 1:Coverage of Microcredit Program Organization No. of Borrowers Outstanding Loan (in million Taka) NGO-MFIs (June 2006) 18,415,878 78,930.57 Grameen Bank (June 2006) 6908704 33235.46 Government Program (December, 2005) 1,997,240 7,710.05 Sub Total 27,621,573 120,493.52 Nationalized Commercial Banks (December, 2005) 2311150 32783.45 Private Banks (December, 2005) 164113 1106.46 Sub Total 2,475,263 33,889.91 Grand Total 30,096,836 154,383.43 Source: Microcredit Regulatory Authority, Grameen Bank It is estimated that after considering the overlapping problem, which is expected to be over 40%, the effective coverage would be around 18.05 million borrowers. Out of 18.05 million borrowers covered by microcredit program, about 62% are below poverty line and so over 11.19 million poor borrowers are covered by microcredit program by 2006. Microcredit programs of NGOs (known as NGO-Microfinance Institutions or NGO-MFIs) and Grameen Bank play dominant role in this financial market, NGO-MFIs serve more than 61 percent and Grameen Bank alone serves 24 percent of the total borrowers. Among NGO-MFIs more than 80 percent of the outstanding loan disbursed by the top 20 NGOs, three of them are very large and have coverage all over the country. Service charge on credit varies from 10% to 20% at flat method of collection, all partners of Palli Karma-Sahayak Foundation (PKSF) charge 12.5%. Average interest offered by NGO-MFIs on savings to the members is 5%. Near about 90% of the clients of this sector are female. Loan recovery rate is generally very high compare to the banking sector, which is over 90%. Average loan size of NGO-MFIs was found around Taka 4,000. Microcredit Regulatory Authority Microfinance is now a nation-wide activity in Bangladesh . The issue of a regulatory framework has come to the forefront because NGO-MFIs, the major provider of this service, are providing financial services to the poor outside the formal banking system. The government of Bangladesh enacted 'Microcredit Regulatory Authority Act 2006'(act number 32 of the year 2006) on July 16, 2006 with effect from August 27, 2006 with a view to ensuring transparency and accountability of microcredit activities of the Microfinance Institutions (MFIs) in the country. Microcredit Regulatory Authority (MRA)has been established under the act which is now empowered and responsible to implement the said act and to bring the microcredit sector of the country under a full-fledged regulatory framework. According to the Act, no MFI can carry out microcredit activities without obtaining licence from MRA. Section 15(2) of 'Microcredit Regulatory Authority Act 2006' has made it mandatory for MFIs who had microcredit activities before the effective date (August 27,2006) of the act to apply for licence to MRA within six months (February 26, 2007) from the effective date of the act. Accordingly 4236 NGO-MFIs have applied to MRA for licence by February 26, 2007. It was decided by the Authority that among these organizations, only those organizations will be considered for licence who can fulfill minimum criteria (have equal to or more than 1000 borrowers or equal to or more than taka 40 lakhs loan outstanding). Rest of the organizations already applied to the Authority will be allowed time till June 2009 to reach the above mentioned minimum criteria. If they are unable to meet those criteria within specified time they will have to close their microcredit operation after that given time. Accordingly applications from 705 institutions are being considered for license. After evaluating their application and real operations at field level they are being considered finally as eligible to get license. Upto May 20, 2008 the authority has issued 250 licence to different NGO-MFIs and licensing procedure of other selected NGO-MFIs are under process. MRA is also working to prepare details rules and policies to monitor and supervise licensed NGO-MFIs that will cover governance issues, financial transparency, mode of operations and other related issues to ensure transparency and accountability in operation. List o f banks in Bangladesh The commercial banking system dominates Bangladesh 's financial sector. Bangladesh Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The banking system is composed of four state-owned commercial banks, five specialized development banks, thirty private commercial Banks and nine foreign commercial banks. The Nobel-prize winning Grameen Bank is a specialized micro-finance institution, which revolutionized the concept of micro-credit and contributed greatly towards poverty reduction and the empowerment of women in Bangladesh . Central Bank • Bangladesh Bank (http://www.bb.org.bd/) • Social Islami Bank (http://www.siblbd.com/) Pursuant to Bangladesh Bank Order, 1972 the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named it Bangladesh Bank with retrospective effect from 16 December 1971. State-owned Commercial Banks The banking system of Bangladesh is dominated by the 4 Nationalized Commercial Banks , which together controlled more than 54% of deposits and operated 3388 branches (54% of the total) as of December 31, 2004.[1] The nationalized commercial banks are: Specialised Bank of Bangladesh: • Karmosangesthan Bank (http://www.karmasangsthanbank.gov.bd/) • Bangladesh Krishi Bank (http://www.krishibank.org.bd/) • Sonali Bank (www.sonalibank.com.bd) • Janata Bank (www.janatabank-bd.com) • Agrani Bank (http://www.agranibank.org/) • Rupali Bank (http://www.rupalibank.org/) Private Commercial Banks Private banks are the highest growth sector due to the dismal performances of government banks (above). They tend to offer better service and products. • AB Bank Limited (www.abbl.com) • BRAC Bank Limited (www.bracbank.com) • Eastern Bank Limited (http://www.ebl-bd.com/) • Dutch Bangla Bank Limited (http://www.dutchbanglabank.com/) • Dhaka Bank Limited (http://www.dhakabankltd.com/) • Islami Bank Bangladesh Ltd (http://www.islamibankbd.com) • Pubali Bank Limited (http://www.pubalibangla.com/) • Uttara Bank Limited (http://www.uttarabank-bd.com/) • IFIC Bank Limited (http://www.ificbank.com.bd/) • National Bank Limited (http://www.nblbd.com/) • The City Bank Limited (https://www.thecitybank.com.bd/) • United Commercial Bank Limited (http://www.ucbl.com/) • NCC Bank Limited (https://www.nccbank.com.bd/) • Prime Bank Limited (http://www.primebank.com.bd/) • SouthEast Bank Limited (http://www.sebankbd.com/) • Al-Arafah Islami Bank Limited (http://www.al-arafahbank.com/) • Social Islami Bank Limited (http://www.siblbd.com) • Standard Bank Limited (http://www.standardbankbd.com) • One Bank Limited (http://www.onebankbd.com) • Exim Bank Limited (http://www.eximbankbd.com) • Mercantile Bank Limited (http://www.mblbd.com) • Bangladesh Commerce Bank Limited (http://www.bcbl-bd.com) • Mutual Trust Bank Limited (http://www.mutualtrustbank.com) • First Security Islami Bank Limited (http://www.fsblbd.com) • The Premier Bank Limited (http://www.premierbankltd.com) • Bank Asia Limited (http://www.bankasia-bd.com) • Trust Bank Limited (http://www.trustbank.com.bd) • Shahjalal Islami Bank Limited (http://www.shahjalalbank.com.bd) • Jamuna Bank Limited (http://www.jamunabankbd.com) • ICB Islami Bank (http://www.icbislamic-bd.com/) Foreign Commercial Banks • Citibank (http://www.citi.com/domain/index.htm) • HSBC (http://www.hsbc.com.bd) • Standard Chartered Bank (http://www.standardchartered.com/bd) • Commercial Bank of Ceylon (http://www.combankbd.com) • State Bank of India (http://www.statebankofindia.com) • Habib Bank (http://www.habibbankltd.com) • National Bank of Pakistan (http://www.nbp.com.pk) • Woori Bank (http://www.wooribank.com) • Bank Alfalah (http://www.bankalfalah.com) Specialized Development Banks Out of the specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) were created to meet the credit needs of the agricultural sector while the other two ( Bangladesh Shilpa Bank (BSB) & Bangladesh Shilpa Rin Sangtha (BSRS) are for extending term loans to the industrial sector.[1] The Specialized banks are: • Grameen Bank (www.grameen-info.org) • The Dhaka Mercantile Co-operative Bank ltd (www.dmcbl.com) • Bangladesh Krishi Bank (http://www.krishibank.org.bd) • Bangladesh Development Bank Ltd (http://www.bdbl.com.bd) • Rajshahi Krishi Unnayan Bank (http://www.rakub.org.bd) • BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) (http://www.basicbanklimited.com) • Ansar VDP Unnyan Bank (http://www.ansarvdpbd.org/)