BFIU mandates ethical undertakings for banks' top brass

Bank clients waiting for transactions

Dhaka, Apr 29 - The Bangladesh Financial Intelligence Unit (BFIU) has introduced a mandatory “Ethical Undertaking” and “Declaration” for chairmen, directors, and chief executives of commercial banks to address lapses in corporate governance and loan management.

In a policy directive issued to the managing directors and chief executive officers of all banks, the BFIU emphasised the need to strengthen ethical standards, accountability, and transparency to combat money laundering and financial crimes.

Mandatory Undertaking for Directors

According to the new instructions, bank chairmen and directors must sign a specific "Ethical Undertaking".

This document binds them to several key principles.

They must refrain from using their positions for personal, family, or group interests and must provide written disclosure if any potential conflict arises, directors are strictly prohibited from providing informal or policy-violating instructions regarding loan approvals, rescheduling, or restructuring and they must not interfere in the reporting process for suspicious transactions (STR/SAR) and must cooperate fully with BFIU directives.

Public Declaration by CEOs

Managing Directors and CEOs are now required to sign a “Declaration” affirming their commitment to fostering a culture of compliance and accountability.

Notably, this signed declaration must be prominently displayed in their respective offices. The declaration highlights the executive's pledge to remain free from internal or external influence and to prioritise the stability and reputation of the country's financial sector.

Anti-Corruption Awareness

The BFIU also directed banks to display posters and banners regarding complaint submission procedures and anti-corruption slogans in visible areas of the bank. These slogans include messages such as "No to Corruption and Bribes," "Safe Banking in Legal Transactions," and "No Loan Approval Outside Policy".

The BFIU stated that these measures are essential to rectify the lack of effective capacity in risk control and credit management observed in recent years.

The directive, issued under the authority of the Bangladesh Bank, takes effect immediately for all current and future appointments or re-appointments of top-tier bank officials. - UNB