Combating Money Laundering in Bangladesh: Challenges, Developments and Prospects

Money laundering remains one of the gravest threats to the financial system of Bangladesh. The country has long been vulnerable to illicit financial flows due to its dependence on remittances, weak trade monitoring mechanisms, prevalence of corruption and the large size of its informal economy. Transparency International Bangladesh (2023) estimates that between USD 12 to 15 billion are laundered out of Bangladesh each year, while the Bangladesh Institute of Bank Management has identified trade-based money laundering as the single largest source of leakage costing the country USD 16 billion annually. In response, Bangladesh has enacted the Money Laundering Prevention Act (2012) and the Anti-Terrorism Act (2009) and has strengthened institutional capacity through the Bangladesh Financial Intelligence Unit (BFIU), the Anti-Corruption Commission and more recently the Income Tax Intelligence and Investigation Unit. Private banks such as BRAC Bank have also built compliance frameworks to mitigate risks at the institutional level. Despite these advances, persistent challenges remain including weak enforcement, inadequate inter-agency coordination and emerging risks posed by fintech and digital financial services. This thesis explores the evolution of anti-money laundering frameworks in Bangladesh, analyzes vulnerabilities across banking and non-banking sectors, and assesses the effectiveness of enforcement and prevention mechanisms. It argues that while significant progress has been made through legal reforms and international cooperation, achieving a resilient anti-money laundering regime requires deep structural reforms, advanced technological adoption and political commitment to transparency.