Central bank's weak stance deforms Bankers' Book Evidence Act

 
Bangladesh Parliament on 27 November 2021 passed the Bankers' Book Evidence Bill 2021, defining the digitally recorded documents as such evidence under the proposed law. In connection with this law, Bangladesh Bank (BB) ordered all banks in January 2022 to strictly follow this act and to ensure the security of the financial information of depositors in banks.

 However, of late National Board of Revenue (NBR) and some other government organizations are trying to access the financial data of banks' depositors which is an infringement of Bankers' Book Evidence Act. If any authority is allowed to access depositors' information in banks, it will discourage people to save their money in banks. In that case liquidity crisis of banks will be more intensified, according to economists. Financial experts have stated that if any organization is allowed to get hold of the private financial information of bank accountholders, it will lead to a greater magnitude of money laundering from Bangladesh to foreign countries.

 Depositors will face harassment at the hands of law and order forces and NBR if the monetary details of depositors are disclosed. It may be recalled that the first and original Bankers' Book Evidence Act was made in 1891 which gives full security of the personal and financial information of banks' clients.

 Financial scholars and legal experts have expressed the opinion that nobody's bank account details should be exposed without categorical order from court and the central bank. Bangladesh Financial Intelligence Unit (BFIU) is in charge of looking into suspicious financial activities and to resist financial vices like money laundering, terror finance, tax evasion etcetera. If NBR is authorized to access bank accounts, it will undermine the status of BFIU and it supersedes court too.

 BFIU is associated with international entities like Egmont Group, Global Financial Integrity (GFI), Financial Action Task Force (FATF) and so on to exchange information about illegal money transfer. Economists have commented that Bangladesh Bank is not being able to play its role effectively to this end which is why the Bankers' Book Evidence Act is on the verge of being distorted.

 The data management is going to be the biggest asset and also challenge for most countries in the coming days. Maintaining the privacy of data will have to ensure at any cost. This is particularly essential for the financial sector whose biggest capital is trust. If the bank accounts remain wide open for intervention by tax authorities or any other government agency the users will certainly be scared and refrain from keeping money in banks. This will invariably invites liquidity crisis and subsequent bank runs. The financial markets will also behave irrationally if the privacy of data is compromised. There are designated agencies like BFIU and investigating organizations. BFIU can always take the help from the latter to dig any unlawful transactions. There is no need to fuel speculation and scare-mongering in the banking sector which is already under multiple stresses. One cannot force market to tame it. It has its own ways of responding to the demand and supply imperatives.   Former adviser to caretaker government Dr. Wahid Uddin Mahmud said, "People's confidence on banks will be downgraded if their bank account details are unfolded to certain authorities. In that case people will lose interest in saving money in banks and capital flight will increase."

 Eminent legal expert Dr. Shah Deen Malik said, "Authorizing any government organization to access the monetary facts and figures of depositors will put people in torment and it will stimulate corruption."

 Professor Anu Muhammad of Jahangirnagar University said, "Bangladesh's banking system is undergoing a great deal of corruption, irregularities and mismanagement. On top of that if people's bank accounts are accessed by government authorities, it will further spoil people's faith in banks and it will plunge banks into more liquidity shortage."  UNDP Country Economist Dr. Nazneen Ahmed said, "Advice from court and the central bank should be sought before accessing any depositor's monetary details in banks. It would be very much unfortunate if general people's monetary safety is jeopardized."