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The mobile financial services (MFS) sector in Bangladesh is being used as a key channel for illegal financial transactions, including money laundering, bribery, online gambling, terrorist financing, and cryptocurrency trading, a latest Transparency International Bangladesh (TIB) study has revealed.
Released on Tuesday at a press conference at its office in Dhaka, the study titled ‘Governance Challenges in Mobile Financial Services Sector in Bangladesh’ analysed 13 active MFS providers (MFSPs) and the roles of relevant regulatory and supervisory institutions. Data collection for the study spanned from November 2023 to May 2025.
Survey findings show that 6.3 per cent of individual 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 fraud and scams ranging from a minimum of Tk 300 to a maximum of Tk 83,000, the TIB study revealed.
Agent account holders faced losses between Tk 200 and Tk 376,000, while merchant account holders incurred losses ranging from Tk 53 to Tk 45,000.
Among the common fraudulent activities reported were extorted through deceptive or false information (52.6 per cent), deception via phone calls 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, as per the survey data.
TIB 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.
Citing the CID report, TIB also said it is estimated that around $7.8 billion (nearly Tk 750 billion) was laundered through MFS in 2022.
The research highlights a lack of long-term strategic planning in the development and growth of the sector. Instead, there is a prevailing tendency toward adhoc decision-making, weak policy frameworks, legislative gaps, and the undue influence of political and vested interest groups.
A concerning tripartite alliance among certain MFSPs, regulatory and monitoring authorities, and politically influential actors has captured policy, manipulated oversight mechanisms and exploited state institutions to monopolise control over the sector, it observed.
TIB also identified serious gaps in financial monitoring. Most MFSPs delegate supervision of agents to distributors, resulting in weak oversight and increased fraud risk.
To address these challenges, TIB issued a 13-point set of recommendations, foremost among them being the enactment of a dedicated MFS law to ensure transparency, fair competition, and customer protection.
It also called for AI-driven suspicious transaction monitoring, stronger data privacy safeguards, a standardized code of conduct for agents, and enhanced complaint redress mechanisms.
The study underscores 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.
Dr Iftekharuzzaman, executive director of Transparency International Bangladesh, among others, was present at the press conference.
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