Banking Frauds Under Bns
π¦ What is Banking Fraud?
A banking fraud occurs when an individual or a group deliberately deceives a bank or its customers for unlawful financial gain. Banking frauds typically fall into several categories:
Loan fraud
Forgery
Cyber frauds
Money laundering
Bribery and corruption
βοΈ Legal Provisions under Bangladesh National Standards (BNS)
In Bangladesh, the following sections of the Bangladesh Penal Code (BNS) are commonly invoked in banking fraud cases:
Section 417-420 BNS β Cheating and dishonestly inducing delivery of property
Section 467-471 BNS β Forgery and using forged documents
Section 409 BNS β Criminal breach of trust by a public servant or banker
Money Laundering Prevention Act, 2012
Bank Companies Act, 1991
π Detailed Case Laws on Banking Fraud in Bangladesh
Here are five notable cases of banking fraud in Bangladesh, along with detailed explanations:
1. Hallmark Group Loan Scam (Sonali Bank Scam)
Year: 2012
Fraud Amount: BDT 3,547 crore
Legal Sections: BNS 409, 420, 467, 468, 471; Money Laundering Prevention Act
Facts:
Hallmark Group, in connivance with officials of Sonali Bankβs Ruposhi Bangla Hotel branch, managed to fraudulently obtain loans worth over BDT 3,500 crore by submitting forged documents, fake letters of credit, and non-existent business transactions.
Modus Operandi:
Bank officials approved loans without proper verification. Fake LCs (Letters of Credit) were used to withdraw money that was never intended to be repaid.
Judgment:
ACC (Anti-Corruption Commission) filed 11 cases. Several officials including the bankβs General Manager and Hallmark's MD Tanvir Mahmud were arrested. Many are still undergoing trial, though some convictions were handed down.
Legal Significance:
This case exposed massive lapses in internal bank auditing and led to regulatory reforms in state-owned banks.
2. BASIC Bank Loan Scam
Year: 2009β2013
Fraud Amount: BDT 4,500 crore
Legal Sections: BNS 409, 420, 467; Money Laundering Prevention Act
Facts:
Former Chairman Sheikh Abdul Hye Bacchu allegedly facilitated loans to fictitious companies through internal collusion with management. Over 100 companies received loans without proper documentation.
Investigation:
The ACC filed 56 cases but did not name the Chairman initially, raising controversy. Later pressure from the High Court forced a reinvestigation.
Outcome:
Investigation still ongoing as of 2023; several bank officers arrested and charged.
Legal Significance:
This case highlighted how politically connected individuals can misuse power to influence banking institutions. Also led to more scrutiny over the independence of ACC.
3. Janata Bank β AnonTex Group Scam
Year: 2014β2018
Fraud Amount: BDT 5,504 crore
Legal Sections: BNS 420, 467, 471; Bank Companies Act
Facts:
AnonTex Group received loans from Janata Bank despite defaulting on earlier loans. The company used multiple shell companies to obtain loans and redirect funds.
Investigation:
Loan was approved bypassing credit risk assessment. Many loans were restructured and went into default again.
Current Status:
ACC has filed cases. A number of Janata Bank officials have been suspended.
Legal Significance:
The case highlighted manipulation of loan restructuring to hide non-performing assets (NPAs). It also prompted the central bank to tighten regulations around large exposures.
4. NRB Commercial Bank IT Fraud (Cyber Crime)
Year: 2020
Fraud Amount: Approx BDT 30 crore
Legal Sections: ICT Act 2006; BNS 420, 468
Facts:
Hackers gained access to the bankβs internal server using phishing techniques and transferred money to multiple accounts. Some employees were found to have aided the attackers.
Outcome:
Bank reported incident to Bangladesh Bank. Several arrests were made under the Information and Communication Technology (ICT) Act. Case is under trial.
Legal Significance:
First major example of internal IT system breach in a private bank in Bangladesh. Resulted in increased focus on cybersecurity in the financial sector.
5. Islami Bank Bangladesh Ltd (IBBL) β Anonymous Loan Disbursement
Year: 2022
Fraud Amount: BDT 7,000 crore (alleged)
Legal Sections: BNS 409, 420; Bank Companies Act
Facts:
A series of large loans were issued without proper documentation or due diligence to unknown borrowers. It raised major questions about internal governance in Islami Bank.
Investigation:
Bangladesh Bank launched a special audit. The issue is under probe as of 2024. Allegations suggest high-level political and corporate collusion.
Significance:
Shows the risks involved when Shariah-compliant banks lower compliance standards. Strengthened calls for tighter central bank control.
π Common Patterns in These Frauds
Collusion between bank officials and borrowers
Use of shell companies and forged documents
Lack of due diligence or manipulation of internal audit reports
Political interference and weak regulatory enforcement
Use of money laundering networks to reroute funds overseas
π‘οΈ Preventive Measures
Strengthening internal audits
Strict KYC (Know Your Customer) protocols
Better oversight by Bangladesh Bank
Use of AI-based fraud detection systems
Independence of Anti-Corruption Commission (ACC)
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