Combating Money-Laundering by the Financial Institutions: An Analysis of Challenges and Efforts in Bangladesh

Money laundering and measures to combat it have become the focus of an intense international effort. The effects of money laundering on economic development are difficult to quantify, however, it is clear that such activity damages the financial institutions, reduces productivity in the economy's real sector by encouraging crime and corruption, and can distort the economy's external sector. For developing countries to combat money laundering become more difficult than developed countries because of their inadequate regulatory environment and vulnerable financial system. The paper took a step in pointing out the effects and challenges of Money Laundering to the financial institutions in Bangladesh. The paper moves with elaborating the international developments and control mechanisms to deal with the problem of money laundering in the financial sector. In light of the aforesaid discussion the paper then proceeds to analyze the position of Bangladesh in terms of financial institutions in controlling money laundering keeping up with the mandate of international forum. The last part analyzed the data collected on the basis of questionnaire survey and tries to find out the current initiatives and challenges in the financial sector of Bangladesh to combat money laundering.