Bank Asia is facing a Tk 30 lakh penalty as an inspection by Bangladesh Bank uncovered its involvement in facilitating capital flight from the country.
The central bank’s Department of Foreign Exchange Inspection had imposed the fine on September 24 after finding that the lender violated foreign exchange laws by helping two clients siphon large amounts of foreign currency abroad.
On condition of anonymity, a senior Bangladesh Bank official told TIMES that the bank’s involvement has been proven beyond doubt, leaving no scope for appeal.
Therefore, the maximum punishment under law was applied, he said.
According to the inspection report, two accountholders – Farhana Karim and Alayna Chowdhury – transferred around $2.18 lakh (approximately Tk 2.66 crore) abroad in several instalments using their Resident Foreign Currency Deposit (RFCD) accounts with Bank Asia.
Furthermore, the money was not legitimately earned but collected in cash from the curb market and deposited repeatedly by different individuals on their behalf, bypassing regulatory limits and documentation requirements.
A RFCD account allows Bangladeshi citizens to deposit and use foreign currency they legally brought into the country while overseas.
The investigators found that during 2023 and 2024, the two clients deposited significantly more than the permitted threshold for foreign currency in their RFCD accounts and subsequently spent the funds while overseas through bank cards.
In the case of Farhana Karim, she submitted fabricated travel documents to justify deposits of above $10,000 at a time even though she was abroad when some deposits were made. In multiple instances she deposited cash several times on the same day, eventually accumulating nearly $1.50 lakh without having submitted any mandatory customs declaration forms.
Bangladesh Bank’s report further states that the deposits were made by third parties on her behalf and the US dollars used were sourced from the curb market, not brought into the country through legitimate means.
The same pattern was detected in the account of Alayna Chowdhury, who while abroad, had an associate deposit $68,000 into her RFCD account, which she spent overseas using bank cards.
The curb market is an informal market where foreign currency is bought and sold outside of the official banking channels.
Under foreign exchange management rules, a Bangladeshi citizen may spend up to $12,000 abroad annually. Although RFCD accounts allow foreign currency to be used overseas beyond that limit, the money deposited must be legally brought into the country.
Anyone returning from abroad with more than $10,000 must declare it upon arrival using the Foreign Money and Jewellery Declaration form and deposit it into an RFCD account within 30 days.
The two clients did neither. Instead, they used cash obtained from the open market, deposited it multiple times, and drained it through card usage abroad.
The Bangladesh Bank inspection observed that such systematic and repeated breaches could not have been carried out without the negligence, assistance or wilful complicity of Bank Asia.
By allowing unrestricted cash deposits, ignoring suspicious transaction patterns and enabling outward spending of illegally sourced dollars, the bank facilitated a form of money laundering, the report said.
For that reason, the central bank imposed the highest permissible fine of Tk 30 lakh.
Transparency International Bangladesh (TIB) Executive Director Iftekharuzzaman said such incidents seriously undermine public trust in the banking system.
He added that banks must remain vigilant to ensure their channels are not misused for illicit transfers, and Bangladesh Bank should strengthen its monitoring to prevent laundering through formal institutions.
Bank Asia Managing Director Sohail RK Hussain did not respond to requests for a comment on the matter by the time this report was filed.
