It is not a back-office issue, it’s a tax on confidence, growth and credibility globally. Here, in our motherland, the damage can manifest itself in several ways simultaneously: fewer trusted investors, more cautious correspondent banks, less interest in foreign investment, and the inability to outpace scams and other forms of financial crime through digital platforms. The country doesn’t only lose out on money when financial crime goes mainstream, it loses the trust which makes money move within the country.
Fraud and poor regulation are the first casualties if investors are concerned. Market volatility is OK, but when people start to think that the rules are not applied evenly, or that records are not reliable, that’s when it begins to be difficult. The loss of revenue, instability of foreign exchange earnings and growth has been reported as significant challenges in Bangladesh due to the illegal money outflows, trade misinvoicing and leakages of about 20% in public revenues being expected as a result of corruption. As soon as the investors realise the risk involved in hidden losses they begin to urge, in exchange for those risks, for a higher return on their investment or they may withdraw their money somewhere else.
Financial crime also degrades the international reputation of Bangladesh, having no currency, currency notes or money that can be repatriated with ease if lost. Global partners pay attention to the performance of the country in combating the money laundering, managing suspicious money flows and combating cyber fraud. The increase in suspicious activity reports as seen in FY25 would indicate that the system is being strained, despite it increasing through better detection. Reputation matters because it is not all about making money in modern finance, it’s at times about belief.
One of the least visible but most important areas where weak compliance affects correspondent banking is next. Next is one of the least visible but most important areas impacted by weak compliance: correspondent banking. It is evident from Bangladesh bank instructions that banks should gather adequate information about the respondent banks, should refrain from banking shell banks and should implement improved due diligence if the risk of money laundering is elevated. Those controls’ impact on weakening ties with foreign banks could stifle paper flow for trade, increase cost of trade transactions, and make trading across the border more difficult. In an import driven economy like ours, it’s no longer a technical problem but a huge business obstacle.
Money laundering and tax evasion is a small man-with-a-big-business fed within the Nation, silent and unremitting. UNCTAD-related data point to the high cost of Bangladesh from trade misinvoicing of over 8 billion U.S. dollars each year, along with pressures on foreign direct investment, infrastructure investments, foreign exchange and tax revenue. The consequence of a fraudulent invoice, or hidden transfer is not just that one fraud is costing one deal, but that the state isn’t able to fund roads, power, services, and social protection. As tax evasions and disguised trade continue to reduce the tax base, honest business will end up bearing a higher burden of taxation.
Financial crimes are no longer a rarity day-to-day with the emergence of fraudsters in cyberspace. Bangladesh bank cautions against transactions sharing of OTP, password and sensitive data and has also indicated the high occurrence of online financial fraud and fake offers. It is no longer reserved for a high-tech hacker and is now related to phishing, fake customer service calls, social engineering, QR code hacks and payment fraud that targets regular visitors. Damage accumulates: damage to thousands of identified victims can still have a wider impact on trust in digital payments, e-commerce and mobile finance services.
Financial crime facilitated by technology is particularly harmful as it can easily grow rapidly and generate confusion in its wake. Fraudsters may seem to be from an organization, design fake investments or use online platforms to steer cash around in a way that is difficult to track back up. In response to this, the legal system has been opened-up with the Money Laundering Prevention Act and the Bangladesh computer crimes and cyber offences Act, which empowers the legal system to seize money-laundering assets and identity theft assets and shortened the statute of limitations for money-laundering and other identity and computer-related offences. For that is an important legal framework, but when law enforcement is credible, timely, and when the law is enforced.
So, what the law says? From the legal perspective, this nation already has an arsenal to combat the offences of scam. If a person is convicted then the Money Laundering Prevention Act, 2012 allows for the seizure of property that is directly or indirectly associated with a money laundering offence or a predicate offence. The Cyber Security Ordinance, 2025 superseded the previous cyber security law and extends to cover offenses including cases of digital fraud, misuse of identity and cyber crimes. In the real world, scams are not only unethical, but they can also be punishable at a financial, cybercrime, and laundering crime level, depending on the manner in which the money is transacted and hidden.
There’s not a problem more dangerous to true compliance than another institution getting embarrassed. But what it means is that the whole economy begins discounting trust. Foreign investors become more cautious; correspondent banks ratchet up their efforts to verify compliance; honest businesses incur increased compliance costs; the public is free to become more susceptible to fraud. However, without growth and this kind of drag, our country cannot achieve sustainable growth, better financial inclusion and a better standing in global markets.
The fact is that financial crime is treated as a “small fish”. But it is not. It poses a direct threat to employment, income, trade, and national security, and it costs the consumer, from the small importer to the first-time online banking customer. In my view, compliance should be seen not as a form of paperwork but as a form of economic protection for Bangladesh. Otherwise, the nation continues to spend more and incrementally lose trust that growth can be achieved.
Samiha Mamun is a Finance Graduate of the Army Institute of Business Administration (Army IBA), affiliated with the Bangladesh University of Professionals in Savar, Dhaka, trained in FCC (Financial Crime and Compliance). samihamamunmeem@gmail.com
