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The mobile financial services (MFS) sector is being used for illegal financial transactions, a new Transparency International Bangladesh (TIB) study has revealed.
"There is a growing and deeply concerning trend of MFS being used for illegal financial activities, such as money laundering, bribery, online gambling and betting, terrorist financing, and cryptocurrency transactions," it said.
Released on Tuesday at a press conference at the TIB office in the capital, the study titled "Governance Challenges in Mobile Financial Services Sector in Bangladesh" analysed 13 active MFS providers and the roles of the relevant regulatory and supervisory institutions.
Data was collected for the study from November 2023 to May 2025.
The survey findings show 6.3 per cent of individual MFS account holders, 17.0 per cent of agents, and 1.6 per cent of merchants reported being victims of fraud during the study period.
Among them, 3.6 per cent of individuals, 8.7 per cent of agents, and 1.4 per cent of merchants incurred financial losses.
Personal account holders experienced financial losses due to frauds and scams ranging from a minimum of Tk 300 to a maximum of Tk 83,000, the study revealed.
Agent account holders faced losses between Tk 200 and Tk 376,000, while it was from Tk 53 to Tk 45,000 for merchant account holders.
Among the common fraudulent activities reported were extortion through deceptive or false information (52.6 per cent), deception via phone call or SMS (42.1 per cent), and fraud through hacking (12.3 per cent).
Despite these significant losses, only 7.6 per cent of individual account holders, 27.4 per cent of agents, and 4.2 per cent of merchants filed a case or general diary (GD) with the relevant police authorities.
The study said agents facilitating gambling and betting operations are active nationwide, enabling a network that extends beyond local betting into broader money laundering schemes.
Increasingly, these operations involve the use of MFS to purchase US dollars, convert them into cryptocurrencies, such as Bitcoin, and smuggle funds out of the country.
A Criminal Investigation Department (CID) report estimated that around $7.8 billion (nearly Tk 750 billion) was laundered through MFS in 2022.
Citing media reports, it said nearly Tk 23.56 billion was misappropriated through financial frauds related to the distribution of allowances and stipends, as well as the irregular creation of additional e-money.
The money was allegedly laundered abroad through anonymous shareholders of Nagad, it also said.
The TIB study highlighted a lack of long-term strategic planning for the MFS sector's development.
Instead, there is a prevailing tendency towards ad hoc decision-making, weak policy frameworks, legislative gaps, and the undue influence of political and vested interest groups, it noted.
A concerning tripartite alliance among certain MFS providers, regulatory and monitoring authorities, and politically influential actors has captured policy, manipulated oversight mechanisms, and exploited state institutions to monopolise control over the sector, the TIB observed.
Despite the existence of the National Payment Switch Bangladesh (NPSB), the Bangladesh Bank launched the Binimoy platform at an estimated cost of Tk 650 million under the influence of the Information and Communication Technology (ICT) Division under the Ministry of Posts, Telecommunications, and Information Technology, according to the study.
The TIB also identified serious gaps in financial monitoring. Most MFS providers delegate the supervision of agents to distributors, resulting in weak oversight and increased fraud risk.
To address these challenges, the TIB issued a 13-point recommendation, foremost among them the enactment of a dedicated MFS law to ensure transparency, fair competition, and customer protection.
It also called for artificial intelligence (AI)-driven suspicious transaction monitoring, stronger data privacy safeguards, a standardised code of conduct for agents, and enhanced complaint redress mechanisms.
The study underscored that without immediate reforms, Bangladesh's MFS sector risks further erosion of public trust and exclusion of vulnerable populations from the promise of inclusive financial services.
TIB Executive Director Dr Iftekharuzzaman, among others, was present at the conference.
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