At least 5,000 agents from different mobile financial services have made suspicious transactions involving around Tk 25,000 crore, meant to be handed over by Bangladeshi expatriates, over the past four months.
The money was channeled through hundi, a cross-border money transfer method that bypasses the legal banking system.
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Hundi traders have enticed Bangladeshi migrants to use the illegal channel to send money home. They use local MFS agents to pay migrants’ relatives or designated persons here in taka against any foreign currency the migrants want to send home, according to the Police’s Criminal Investigation Department.
In doing so, the agents deprived the country of around Tk 25,000 crore in remittances over the past four months, which ultimately hit the country’s foreign exchange reserves, CID Chief Mohammad Ali said yesterday. Mia to reporters at the CID office.
Analyzing the trends, the CID estimated that Bangladesh may have lost around $7.8 billion (around Tk 75,000 crore) in remittances over the past year.
The CID findings, however, only paint a partial picture, as they do not provide detailed data on transactions made via hundi overseas.
CID officials said they launched the investigation after the country’s foreign exchange market became volatile following the rapid appreciation of the US dollar against the taka in May.
Bangladeshi migrant workers and professionals working in different companies and universities were among those who sent money through hundi, they said, adding that it came to light after the arrest of 12 MFS agents and four hundi traders.
Most of the amount was collected by Hundi traders in Dubai and Saudi Arabia, and the rest in Italy, Singapore, Malaysia and Kuwait, a senior CID official told the Daily Star yesterday.
CID officials said these Hundi gangs operate in three groups. The first group collects the foreign currencies from the expatriates abroad while the second group pays the amount to the MFS agents in the local currency. The third group is made up of MFS agents who transfer the money to relatives or persons designated by the expatriates.
The 16 people arrested carried out suspicious transactions involving Tk 20.70 crore over the past four months. The CID arrested 11 of them from different parts of Chattogram and the rest in Dhaka.
The CID also seized 34 mobile phones, 33 SIM cards and Tk 10.46 lakh in cash from the arrestees. Four of the SIM cards were linked to agent accounts which had deposits of Tk 3.46 crore.
With the help of MFS officers, Hundi traders are also carrying out illegal activities such as online gambling, drug trafficking, gold smuggling and yaba trading, the CID chief said. .
Regarding the role of MFS companies, he said Bangladesh Bank would look into the matter. Those arrested are agents. MFS companies should be extra vigilant.
The CID has so far filed three money laundering cases against 45 people with Kotwali Police Station in Chattogram and Khilgaon and Mohammadpur Police Stations in Dhaka.
She also identified six Bangladeshi hundi traders in Saudi Arabia, who collected money from migrant workers and instructed their counterparts in Bangladesh to send the money to the workers’ relatives with the help of officials from the MFS.
Investigators said the majority of these MFS agents came from Chattogram, Brahmanbaria, Cumilla, Kushtia, Khulna and Bagerhat.
Most hundi transactions (27% of around Tk 25,000 crore) were made in the Chattogram area, one of the investigators said.
According to the statement of the case filed with the Kotwali Police Station, investigators discovered suspicious transactions on the agent account of “Joy Computer” belonging to Rupon Kanti Das Joy. In four months since April, 7,825 transactions involving Tk 6.06 crore were made from this account to different MFS accounts, mostly belonging to relatives of migrants.
In another case filed with Khilgaon Police Station, investigators said Tk 11.97 crore was sent to relatives of the expatriate from three merchant accounts through MFS in three months.
Many of those 5,000 agents are involved in hundi trading, online gambling and cryptocurrency trading, the CID official said, adding that most online gambling sites are controlled from Russia.
A BB source said the Bangladesh Financial Intelligence Unit (BFIU) provided the list of 5,000 agents to the CID following suspicious transactions.
Transactions were made from these accounts between midnight and 6:00 a.m., although the peak time for MFS transactions is between 6:00 p.m. and 8:00 p.m. Each of these accounts made four transactions per minute between midnight and 6 a.m., which is highly unusual, the source added.
Asked about the beneficiaries of the Hundi trade, a senior CID official said that part of the Bangladeshi businessmen abroad buy the foreign currencies from the Hundi traders.
“Other buyers include people looking to buy property or seek treatment abroad,” the official added, speaking on condition of anonymity.
“Hundi traders have ties to migrant workers. They collect migrants’ money at their convenience and immediately arrange for its transfer to their relatives,” the official said.
The official suggested that the money transfer system should be made more efficient so that senders can transfer money to their loved ones as soon as possible.
Sources involved in the banking industry say that many expats prefer hundi to send money home, as hundi merchants offer higher exchange rates than the official rate.
Referring to the list of 5,000 officers, Kamrul Ahsan, additional deputy inspector general of the CID, said other names may emerge after further investigation.
“We have just started our investigation… We will continue our efforts to arrest those involved in hundi and other illegal trades,” he told the newspaper.