DHAKA — Ordinary Bangladeshis are losing their savings to a wave of investment scams sweeping the country, with most perpetrators still at large. Schemes are running both online and offline, from unregulated platforms to established financial institutions, drawing in victims with promises of lucrative returns. Some are losing money to banks, others to the stock market.
Under the previous government, Bangladesh’s financial sector became a haven for the corrupt and those engaged in looting. With state patronage, ordinary people’s savings were plundered. In collusion with regulators, banks, insurance firms and the stock market were destroyed in what amounted to a festival of looting, corruption and money laundering. As a result, ordinary citizens were left penniless, while pro-Awami League politicians, businessmen, bureaucrats and other looters built fortunes at home and abroad.
Economists say the lure of high returns on small investments in a short time is the scammers’ chief weapon. After small initial investments yield promised dividends on schedule, investors gain confidence and put in larger sums. They also persuade friends and relatives to invest. Then the scammers vanish, and the investors are ruined.
The same tactic is being used in the cryptocurrency world. Platforms operating in the name of Bitcoin, Ethereum and Binance coin, without any regulator or physical address, are luring people into investment. After losing large sums, victims have no avenue for filing complaints.
Scammers are also targeting religiously observant Bangladeshis under the slogan of “interest-free, Shariah-compliant investing.” The fraud committed by the Ehsan Group of Pirojpur is a major example, with allegations that about 17 billion taka were embezzled. Similar scams operating under names such as “Halal Merchanting” and “Shariah-Compliant Farming” are running across the country. After paying steady dividends for a while, payments suddenly stop and the organizers disappear with large sums.
Other avenues of fraud
E-Valley, Destiny, Unipay2U and Jubok are among Bangladesh’s most discussed fraudulent organizations. They have embezzled crores of taka from thousands of people by dangling the lure of high returns. Destiny allegedly took roughly 1,500 crore taka in the name of various projects, while E-Valley took about 340 crore taka from customers and traders in cash and goods. Many top executives of these companies have been arrested at various points, but victims have yet to recover their money.
Rural fraud in the name of microfinance and cooperatives
Simple, trusting villagers — especially women — are the scammers’ easy targets. They are first enrolled as members by collecting small monthly subscriptions. Later, the lure of large returns, or houses, vehicles or foreign travel, is used to extract large sums. Once large amounts accumulate, the syndicate vanishes. One such organization is the Asha-r Alo Multipurpose Co-operative Society in Bogura’s Sherpur, which collected crores of taka from poor rural women before disappearing. Such schemes are operating across the country, not just one.
State-patronized looting under Hasina
Economists say that while plunder and corruption are routine in Bangladesh, the scale of state-patronized looting under Sheikh Hasina was unprecedented in world history. The corruption and plunder under Hasina pushed the country’s financial sector to the brink of collapse. Several Shariah-compliant banks, including Islami Bank, have gone bankrupt, with investors receiving no dividends.
Bangladesh Bank has now moved to merge five banks that fell victim to looting: First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank and Exim Bank.
Manipulation in stocks, fraud in insurance
Listing loss-making companies through political backing, fictitious transactions and embezzlement from investors’ accounts has driven the stock market into a severe crisis of confidence. While many companies have raised crores from the market, year after year they pay no dividends. In the secondary market, syndicates have lured ordinary investors into traps and looted their capital through manipulation. Mashiur Securities alone embezzled 40 crore taka from about 1,500 investors, leaving nearly 1,500 investors damaged.
Fraud in insurance has become a daily occurrence. In 2023 alone, more than 50,000 complaints over fake agents, hidden conditions and false promises were filed with the Insurance Development and Regulatory Authority (IDRA). About 3,500 crore taka in claims are stuck at various companies. Insurance firms have looted those funds, and prospects of recovery are slim.
Pervasive corruption is the root cause
Dr. Zahid Hossain, a former World Bank economist, said corruption has taken on a systemic character in Bangladesh — across banks, insurance, the stock market, regulators, the administration and the courts. Pervasive corruption opens countless opportunities for scammers, he said. Unless they are stopped, these frauds cannot be ended.
Overall, investing in Bangladesh is no longer a path to income but an uncertain risk. When state and institutional corruption shelters fraud, ordinary people’s savings become weapons in the hands of looters.
Daily Amar Desh
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report