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Former Bangladesh Bank Governor Mohammed Farashuddin has warned that when political power aligns with economic interests, companies resembling the East India Company emerge.
He said that 10–15 such “East India Companies” have already been identified in the country and must be brought to justice.
However, merely seizing their assets is not enough; these assets should be recovered and added to the government’s accounts.
Farashuddin made these remarks on Tuesday while delivering the keynote speech at the “Monthly Macroeconomic Analysis (MMI)” event organized by the private research organization Policy Research Institute (PRI) in Banani, Dhaka.
The program was chaired by PRI Executive Director Khurshid Alam.
“I think we have come to a situation where the government should take a very clear stance that these are the 10, 12, or 15 delinquent companies. We will go all the way to punish them, collect evidence, and pursue every possible course,” he said.
On the issue of freezing bank accounts, Farashuddin cautioned that seizing accounts is not always the best course of action.
“To maintain trust in the banking system, decisions on this matter must be taken carefully,” he said.
He added, “If the spouse or children of a delinquent individual are independent, there is no reason to freeze their accounts. Yet this is happening, and I do not think it will yield positive results. It could undermine confidence in banks. I would advise the government to limit account freezes to only a few cases, particularly among the 10–15 delinquent individuals already identified.”
On money laundering from Bangladesh, Farashuddin said, “Money laundering occurs in almost every country. According to the Financial Integrity Institute of Washington, an average of $7 billion has been laundered annually since 2004. But a friend of mine heading a task force has found it could be as high as $17 billion. These figures are based on the Financial Integrity Institute, so we should not dramatize the issue. We should proceed cautiously, steadily, and do our job.”
Referring to large-scale corruption in recent years, Farashuddin noted that there is no doubt it has occurred, but he emphasized that there is no reason for despair.
“We need to find our own solutions. The current government has so far stayed on the right path. Bold policy decisions are necessary. Bangladesh Bank must be strengthened. Above all, tax collection must increase.”
On bank boards, he said, “The only role of a bank’s board of directors is policy-making. But Bangladesh is the only country where boards only encourage lending. Lending and policy-making should be separated.”
Earlier in the program, PRI Chief Economist Ashikur Rahman presented a paper on the macroeconomy for July–August.
He warned that some “East India Companies” in Bangladesh had pushed the economy to the brink.
“If we fail to protect the independence and efficiency of economic institutions, especially the central bank, new East India Companies could emerge again,” he said.
Rahman added that the biggest weakness in past economic stability was the lack of independence and efficiency of economic institutions.
“In this context, the new Bangladesh Bank ordinance must be approved with due importance,” he said.
Kamran T. Rahman, President of the Metropolitan Chamber of Commerce and Industry (MCCI), said that while the economy remains stable, growth has slowed.
Some indicators, such as exports and remittance inflows, showed improvement in the latest quarter, but private sector investment remains below expectations, and inflation continues to be a major challenge.
Former Dhaka Chamber President Rizwan Rahman noted, “No country can completely stop money laundering. Our failure is in not controlling it. It is still happening. Many individuals who fled abroad had not already established permanent residence, so they launder money from the country for survival.”
Khondokar Sakhawat Ali, Visiting Research Fellow at BRAC Institute of Governance and Development (BIGD), emphasized that Bangladesh Bank must be allowed to operate independently to curb money laundering and ensure economic governance.
He said that due to various influences—from businesspeople, politicians, bureaucrats, the military-civil administration, and media-intellectual circles—the institution cannot fully perform its role.
“Those laundering money today are part of our civil society. The state must take firm action to stop them,” he added.