Latest
Home / CPD in the Media / Dr Debapriya Bhattacharya on capital flight

Dr Debapriya Bhattacharya on capital flight

Debapriya Bhattacharya blamed the country’s political uncertainties for the soaring deposits in Swiss banks.

Published in New Age on Friday, 9 October 2015.

Hunt for Money Laundering : Swiss Bank’s reply dampens BB

Shakahwat Hossain

The central bank of Switzerland told Bangladesh Bank that it could provide information relating to deposits of Bangladeshis in Swiss banks only for the use as evidence in the courts of law.

Bank and financial Institutions Division secretary M Aslam Alam told New Age Tuesday that this was the reply of Swiss National Bank to requests from BB.

The central bank of Switzerland provided no information relating to how many Bangladeshis were maintaining their accounts with Swiss banks or their total deposits as the BB had repeatedly sought over the last one year.

Concerned over growing capital flight from Bangladesh through money laundering led BB to seek the information from the central bank of Switzerland.

The Swiss central bank was silent on the request from BB to sign a memorandum of understanding for sharing and exchanging information that could help track money laundering from Bangladesh.

BB made the requests since 2014 after an annual report of the Swiss central bank released in January that year showed that the deposits of  Bangladeshis in Swiss banks  rose by 36.55 per cent in one year since 2013.

The Swiss central bank’s report also revealed that the total deposits by Bangladeshis soared to 508 million Swiss franc, equivalent to Tk 4,299 crore,  from 372 million franc, equivalent to Tk 3,236 crore during the year under review.

Aslam said that the BB got the reply from the Swiss central bank recently.

He said that the reply would not help BB in holding the probes into the flight of capital from Bangladesh.

He said that until they got the correct information no government agency in Bangladesh would not be able to launch probes or the legal battles against the holders of suspected accounts in Swiss banks.

Economists said that the  flight of Capital from Bangladesh sharply increased in recent years due to corruption, lack of investment opportunities and  political tension.

Centre for Policy Dialogue distinguished fellow Debapriya Bhattacharya blamed the country’s political uncertainties for the soaring deposits in Swiss banks.

Earlier, BB drew a blank over its requests to Canada, Singapore and Malaysia to provide information relating to investments wealthy Bangladeshis made in these countries without taking permission from the central bank.

BB launched the abortive  hunt in the wake of a report of the Global Financial Integrity, based in  Washington revealed in December 2014  that at least $ 1.78 billion, equivalent to Tk 13,700 crore was siphoned from Bangladesh in 2012, up from $600 million equivalent to Tk 4,630 crore in 2010.

A BB investigation team visited Kuala Lumpur last year to cross check reports that an increasing number of Bangladeshis built second homes in Malaysia availing the opportunities it offered to foreign investors.

The team received no cooperation from Malaysia, said BB officials.

Second homes in Malaysia were built by 2,923 Bangladeshis until September 2014.

Bangladeshis ranked third after the Chinese and the Japanese in availing of the Malaysian offers.

No Bangladeshi entrepreneurs took permission from the BB to invest in Malaysia, said BB officials.

It’s a violation of the foreign currency law of Bangladesh unless one took prior permission from the central bank to many any investment abroad, they said.

Economists did not rule out the possibility that the unprecedented capital flights from Bangladesh were closely linked to the series of bank embezzlements that shook the economy since 2009.

Dhaka University economics teacher MM Akash blamed  successive governments for turning a blind eye to wealthy individuals stashing money abroad instead of investing at home.

Comments

Check Also

Financial Express, Page 05,  April 21, 2016

Leaping to a higher growth trajectory: Op-ed citing the State of Bangladesh Economy in FY2015-16 (second reading)

Published in The Financial Express on Thursday, 21 April 2016 Opinion Leaping to a higher growth trajectory Jafar …

Leave a Reply

Your email address will not be published. Required fields are marked *