Bangladeshis remove large sums from Swiss banks

Bangladeshi depositors have withdrawn more than 37.55 million Swiss francs, or nearly Tk 5 billion or $42 million in line with current exchange rates, from the banks of Switzerland in a year.

The annual data published by the Swiss National Bank shows that the funds deposited by Bangladeshi clients in the banks of the central European country dropped to 17.713 million Swiss francs in 2023 from 55.268 million Swiss francs a year earlier, reports bdnews24.com.

The 68 percent decline put Bangladeshis’ deposits in the Swiss banks to the lowest in 28 years.

The secrecy preserved by the Swiss banks and their policy of not asking questions draw a huge number of wealthy customers from around the world.

The Swiss National Bank, however, publishes the country-wise data every year. The annual report gives a glimpse into how much the rich have deposited their money into the banks, without giving details of the clients.

According to the data, the deposits by Bangladeshis reached the highest to 871.112 million Swiss francs in 2021.

The funds deposited by Bangladeshis in the banks of Switzerland crossed 100 million Swiss francs for the first time to 124.3 million Swiss francs in 2006 by the end of the BNP-Jamaat-e-Islami government.

During the 2007-08 military-backed caretaker government, the amount almost doubled to 203 million Swiss francs.

During the current Awami League government, the funds increased gradually to 661.9 million Swiss francs in 2016 from 152.3 million Swiss francs in 2011.

After a drop to 481.3 million Swiss francs in 2017, the funds again rose to 517.7 million Swiss francs in the election year of 2018.

According to the institutions working on corruption prevention and good governance in Bangladesh, the money deposited by Bangladeshis in Swiss banks is “mostly illegally acquired and smuggled out”.

Economists do not think a drop in deposits in the Swiss banks indicates a fall in money laundering.

Ahsan H Mansur, executive director of private think-tank Policy Research Institute, instead believes the fall in deposits means money laundering has increased.

“There can be two reasons for the decrease in deposits in Swiss banks. Firstly, many commercial banks of the country along with the Bangladesh Bank also keep legal deposits in Swiss banks. They have withdrawn their deposits due to the recent economic crisis, insufficient dollars and dwindling reserves.

“On the other hand, those who deposited money through smuggling are withdrawing their funds and investing it in other countries’ stock market, real estate and places with high profit potential. Since the global economic crisis is going on, they don’t want to leave idle money in the bank anymore. A lot of money is going to the US now.”

Mansur said a lot of investment is being made in Dubai and Singapore. “Bangladeshis are doing business by transferring money there. They also have registered companies.”

The former IMF economist said the clients may also have lost interest in the Swiss banks because of a shift in their policy of secrecy under global pressure to prevent corruption.

Switzerland is now exchanging customer information with tax collection agencies of various countries, breaking the tradition of strict confidentiality.

“Certainly, laundering illegal money abroad has increased. But since Switzerland has come under international agreements and they are providing information on the money being laundered, the smugglers are changing their destination and investing in safer places.”