From now on, chairmen, directors, managing directors (MDs) and chief executives of all commercial banks in the country will be required to provide written pledges against corruption, bribery, money laundering and fraud. These pledges must be displayed prominently in their respective offices.
The Bangladesh Financial Intelligence Unit (BFIU) has instructed banks to ensure that these undertakings are signed at the next meetings of their boards of directors.
Letters to this effect were sent to various banks earlier this week. The initiative has been taken as part of stricter measures to reinforce ethics, corporate governance, credit discipline and anti-money laundering efforts in the banking sector. A specific format for the pledge has also been prescribed.
The banking sector has been facing a prolonged disorder over the past decade. In particular, during the tenure of the Bangladesh Awami League government, there were instances of bank takeovers and large-scale plundering through loans issued in both real and fictitious names at certain institutions.
Contents of the pledge
According to the prescribed format, the pledge must include commitments such as: not engaging in, accepting or tolerating corruption or bribery; recognising that both giving and receiving bribes constitute punishable offences; refraining from approving loans outside policy guidelines; and taking an active role in preventing money laundering, financial fraud and illicit transactions.
In addition, separate declarations for managing directors and chief executives include provisions on anti-money laundering compliance, reporting of suspicious transactions, and enhanced vigilance concerning politically important persons.
Why the move
The BFIU stated that, in recent years, weaknesses have become evident in corporate governance, credit management and risk control within the banking sector. Notably, incidents of large-scale loan fraud and irregularities have increased.
In this context, the initiative has been taken to strengthen accountability, transparency and mechanisms to prevent financial crimes.
Mandatory for new appointments
The directive further stipulates that, in future, any appointment or reappointment of a chairman, director or managing director at a bank will require signing the same pledge and declaration.
Scope for direct complaints
Customers who face bribery, corruption or harassment while accessing banking services will be able to lodge complaints directly with the BFIU. The directive states that such complaints will be treated with due importance and investigated thoroughly.
Sector insiders say the initiative may create a degree of psychological pressure among bank directors and MDs, which could help restore discipline.
According to them, its effectiveness, however, will ultimately depend on regular oversight by the BFIU and the strict enforcement of laws.