By Asif Showkat Kallol (Dhaka Bureau)
In an unprecedented effort to restore discipline to its financial sector and reclaim money laundered abroad, Bangladesh has launched an ambitious international legal campaign. Banks in the country have begun hiring world-renowned international law and professional services firms to trace and recover assets built overseas using billions of taka in unpaid loans.
The initiative initially targets 42 major corporate entities, each carrying default loans exceeding Tk200 crore (approx. $16.5 million). In the first phase, investigators are searching for assets allegedly siphoned into 12 strategic jurisdictions: the United States, the United Kingdom, the United Arab Emirates, Canada, Singapore, Belgium, New Zealand, Hong Kong, China, Malaysia, Thailand, and Australia.
Cracking Down on and Capital Flight
Bangladesh’s banking sector has long struggled under a mounting burden of non-performing loans (NPLs) and sluggish recovery processes. Financial observers and banking officials note that many large borrowers systematically transferred loan proceeds out of the country, leaving domestic banks with insufficient collateral inside Bangladesh to cover their outstanding liabilities.
Highlighting the severity of the issue, Bangladesh Bank spokesperson Arif Hossain Khan stated that significant portions of defaulted loans appear to have been siphoned overseas. The central bank is now coordinating with commercial banks and international forensic firms to pinpoint these assets and determine viable legal mechanisms in foreign courts.
The primary focus centres on 11 high-profile individuals and groups currently under investigation by a joint team of Bangladeshi agencies, including the Anti-Corruption Commission (ACC), Criminal Investigation Department (CID), Customs Intelligence and Investigation Directorate, and the Central Intelligence Cell (CIC).
Engaging Global Legal and Forensic Giants
To follow the complex money trail, several prominent global advisory and legal firms have been brought into the process, including Grant Thornton, Baker McKenzie, PwC, DLA Piper, Kroll, EY, and Dentons.
In a secondary phase, data from Bangladesh Bank’s Credit Information Bureau (CIB) was analyzed to flag 42 large defaulting corporate entities. Eight international firms have been tasked with leveraging banking intelligence to map out the exact locations, legal structures, and estimated values of these overseas holdings. Once verified, authorities plan to seek court orders to freeze or seize the assets in the respective foreign jurisdictions.
To minimize upfront costs for domestic lenders, agreements with these international firms are structured on a contingency basis (“success fee” model). Rather than paying conventional legal retainers, firms will receive an agreed-upon percentage of the funds only after assets are successfully traced and recovered.
Cross-Border Legal Hurdles and Challenges
While identifying assets presents a formidable challenge, repatriating the funds is expected to be even more complex.
Bangladesh will have to navigate the distinct judicial systems and asset-recovery laws of 12 separate jurisdictions. Securing asset-freezing orders, conducting cross-border litigation, and liquidating or repatriating frozen assets could turn into a multi-year judicial battle.
Economic analysts observe that with domestic money loan courts stalled by years of procedural delays, shifting focus from ‘the borrower’ to ‘the asset’ marks a fundamental strategy shift. Ultimately, the success of this cross-border strategy will depend on the depth of financial intelligence available, bilateral judicial cooperation, and Bangladesh’s capacity to secure binding court orders abroad.
Asif Showkat Kallol : Works for the German-based online outlet The Mirror Asia as Head of News and is a Contributor at Pressenza-Dhaka Bureau.
