In a sweeping regulatory move to reinforce governance and restore confidence in the financial system, the Bangladesh Financial Intelligence Unit (BFIU) has directed the senior leadership of all scheduled banks to sign formal pledges against corruption and money laundering. The instruction, issued through an internal circular, signals a tougher compliance regime aimed at addressing long-standing concerns over malpractice and weak oversight in the banking sector.
Under the directive, chairmen, directors and managing directors must formally declare that they will neither engage in nor tolerate bribery, corruption or financial misconduct. The BFIU has prescribed a standard format for these declarations and required that the signed pledges be displayed prominently within executives’ offices. This visibility requirement is intended to reinforce accountability and demonstrate a clear institutional commitment to ethical conduct.
The initiative comes amid growing alarm over governance failures, deteriorating credit discipline and gaps in risk management frameworks. In recent years, several large-scale loan irregularities and fraud cases have exposed structural weaknesses, prompting regulators to take more assertive measures.
Beyond general anti-corruption commitments, bank leaders are also required to submit separate declarations specifically addressing the prevention of money laundering and fraudulent trade practices, particularly those linked to letters of credit. These declarations must also be displayed in offices, further embedding transparency within leadership practices.
Key Compliance Measures
| Requirement | Description |
|---|---|
| Mandatory pledges | Senior executives must sign anti-corruption declarations |
| Public display | Signed commitments must be displayed in offices |
| Separate AML declaration | Additional pledge on preventing money laundering and trade fraud |
| Ongoing applicability | Required for all new appointments and reappointments |
| Customer reporting systems | Banks must enable confidential reporting channels |
The directive also places emphasis on customer engagement in identifying misconduct. Banks have been instructed to inform clients that they can report incidents of bribery, corruption or harassment directly to the BFIU. To facilitate this, institutions must establish secure and confidential reporting mechanisms, including complaint boxes and QR code-based systems in visible locations.
Importantly, the BFIU has introduced stricter accountability standards for lending decisions. Approving loans outside policy guidelines, or based on inadequate or improper assessment, will be treated as a punishable offence. The regulator has warned against practices such as approving loans backed by forged documentation, fictitious collateral or manipulated financial data.
The circular underscores a zero-tolerance stance towards money laundering, describing it as a grave offence against the nation. Suspicious or undocumented transactions, including fraudulent export bills and irregular letters of credit, have been identified as critical risk areas requiring heightened scrutiny.
By mandating these measures, the BFIU aims to restore discipline, strengthen governance structures and rebuild public trust in the banking system. The directive reflects a broader regulatory shift towards proactive oversight, with a clear focus on integrity, transparency and long-term financial stability.