Bangladesh – A potential source of grave concern

Sheikh Hasina’s exit from Bangladesh has led to significant political fallout. The new dispensation and its supporters are targeting journalists seen to have been close to the erstwhile Hasina government. The release of BNP leader Khalida Zia, who was convicted on corruption charges in 2018, and the rehabilitation of the Jamaat-e-Islami party, which was banned by Hasina’s government in 2023, is perceived as steps towards creating an inclusive political climate.

However, what should be the concern of the security establishment in India should be the release of Islamist radicals having links with terrorist groups, including Jashimuddin Rahmani, Chief of Ansarullah Bangla Team, an organisation that has links with Al- Qaeida in the Indian subcontinent. The ban on Jamaat-e-Islami Bangladesh has also been lifted. These steps now taken by the new dispensation raises concern over the safety of the minorities, intellectuals and politicians and party offices, belonging to the Awami League.

The question is whether the terrorist groups, who were operating in Bangladesh, were a recent phenomenon or they were in existence even in 1971 when Bangladesh was formed. For this, it is necessary to find out which were the terrorist groups, and who were financing them to get the facts right.

Harkat-ul-Jihad-al-Islami Bangladesh is the Bangladeshi branch of the terrorist group Harkat-ul-Jihad-al-Islami (HuJI). It is banned in Bangladesh and is a banned organisation in the UK HuJI was also responsible for setting up the Indian Mujahideen terrorist group. The group was formed by Maulana Abdus Salam. The other leaders include Shaikhul Hadith Allama and Azizul Haque, who was the Chairman of the political party Islami OikyaJote. Muhammad Habibur Rahman (alias Bulbuli Huzur) was a leader of the HuJI and initially a leader of Bangladesh KhelafatMajlish. The principal of Lalkhan Madrasa in Chittagong, Mufti Izharul Islam Chowdhury, was also a leader of the HuJI.

Amaat-ul-Mujahideen (JMB) is a terrorist organisation set up in 1988 by Abdur Rahman and gained public prominence in 2001 when bombs and documents detailing the activities of the organisation were discovered in Parbatipur in Dinajpur district. JMB was operating in Bangladesh and listed as a terrorist organisation in India, Malaysia, UK, and Australia, besides Bangladesh. JMB was banned by the Government of Bangladesh in February 2005 after attacks on NGOs. But it struck back in mid-August when it detonated 500 small bombs at 300 locations throughout Bangladesh. The group re-organised and has committed several public murders in 2016 in northern Bangladesh as part of a wave of attacks on secularists. The JMB was believed to have contained at least 10,000 members, and have an extensive network of organisations, including connections to legal Islamist organisations. Six of the top leaders of JMB were captured by the RAB security forces in 2005. After being tried and convicted in court, on 29.3.2007, four were executed by hanging for the killing of two judges and for the August 2005 bombings.

In 2015, it was discovered that JMB had been receiving financing from officers at the Pakistan High Commission in Dhaka. Visa Attache, Mazhar Khan, was caught red-handed at a meeting with a JMB operative in April 2015, who said that they were involved in pushing large consignments of fake Indian currency into West Bengal and Assam. Second Secretary, Farina Arshad, was expelled by Bangladesh in December 2015 after a JMB operative admitted to having received 30,000 Taka from her. An offshoot of JMB, the Neo-Jamaat-ul-Mujahideen Bangladesh, effectively operates as the ISIL in Bangladesh.

Shahadat-e al Hiqma (SH) was founded by Abdur Rahman and gained public prominence in 2001 when bombs and documents revealing the activities of SH were discovered in Parbatipur in Dinajpur district. SH was banned on 9.2.2023 by the Bangladesh government. SH announced that it would wage an armed struggle to establish an Islamic State in Bangladesh. SH claimed that they had 35,000 “commandos” and “fighters”. Its founder was arrested on 9.11.2005. The group was then reactivated by Jakir Khandakar in July 2014, who shifted the headquarters to Bandarban District in Chittagong. Towhidi Muslim Janata is mainly known for violent attacks on religious minorities in Bangladesh. How were these organisations financed? Investigations by the US Senate’s Permanent Sub-Committee on Investigations relating to HSBC Bank revealed that HSBC, in 2009 authorised its affiliates to supply Indian rupees to Saudi Rabia’s Al Rajhi Bank, which, the report said, had links to financing terrorism. The report also said that Al Rajhi Bank handled International Islamic Relief Organization (IIRO)’s ‘charitable contributions intended to benefit suicide bombers by directing Al Igatha journal advertisements in Somalia, Sri Lanka, India, and the Philippines’.

The Daily Star, published on 18.7.2012, quoting from the report of the US Senate’s Permanent Sub-Committee on Investigations relating to HSBC Bank revealed its transactions with two of the Bangladesh Banks, Islami Bank Bangladesh Ltd. and Social Islami Bank Ltd. Islami Bank Bangladesh Ltd., (IBB) commenced its operations in 1983 in conformance with Islamic requirements, and became one of the largest private banks providing a wide variety of individual and commercial banking services. Several of the senior officials of the bank were politically important figures within the country or in Saudi Arabia, leading to their designations as Politically Exposed Persons (PEP) in the ‘World Check’ database. IBB has a network of more than 600 correspondent accounts. IBB applied to open accounts with HSBC in 2000, and had accounts with HSBC in 24 locations around the world. IBB, opened a US dollar account with HSBC Bank USA (HBUS) in 2000, and US dollar clearing accounts with HSBC India and HSBC Pakistan, in 2006. In 2007, the HBUS branch in Singapore also sought approval to open an account for the bank to supply it with US dollars in cash, US dollar monetary instruments such as traveller’s cheques and money orders, process US dollar wire transfers, and provide other services. Proposals to open the 2007 HBUS account for IBB immediately raised Antimony Laundering (AML) concerns within HBUS AML Compliance, not only because the bank was located in a country ranked by HSBC as at ‘high risk’ of money laundering but also because members of the Al Rajhi group held a 37% direct ownership interest in the bank. HBUS’ Singapore branch opened the account for IBB in December 2007. Christopher Lok and others approved the account, despite ongoing questions about its primary shareholder, Al Rajhi Bank, whose past links to terrorist financing had received additional attention in the media in early 2007.

HBUS also approved the account despite troubling information about IBB itself which was part of an internal report prepared less than a year earlier by HSBC’s Financial Intelligence Group(FIG). The May 2006 FIG report disclosed that, in March 2006, ‘Abdur Rahman, chief of the Jamaatul Mujahideen of Bangladesh (JMB), and his second-in-command, Bangla Bhai, were arrested for being responsible for the terrorist bomb blasts of 17.8.2005 in Bangladesh’. The FIG report noted that Rahman had an account at IBB.

The FIG report also disclosed that an investigation by the Central Bank of Bangladesh found that two branches of IBB had been engaged in ‘suspicious transactions’ and urged the bank to take action against 20 bank employees, for failing to report the suspicious transactions. The KYC profile noted that, in 2006, FIG recommended classifying IBB as a ‘Special Category Client’, or SCC, HSBC’s designation for its highest risk clients, but that recommendation was rejected, meaning that IBB need not be subjected to any enhanced monitoring. 18 months later, in May 2009, a FIG due diligence report prepared for another Bangladeshi bank with which HBUS did business, disclosed new information relevant to IBB. This information related to the IIRO, a Saudi non-profit organization which, in 2006, had two of its branches and a high ranking official designated by the US as terrorist financiers and added to the list of entities with which US persons are prohibited from doing business.

The 2009 FIG report stated that the IIRO had accounts at both Social Islami Bank (SIB) and IBB. It quoted a 2008 local press article saying that, in response to the action taken by the US in 2006, IBB had frozen its IIRO accounts. In 2010, an HBUS KYC profile for SIB referred a letter from the Bangladeshi Central Bank, dated 30.6.2010, indicating that IIRO had accounts at three Bangladeshi banks, including IBB, which needed to be closed.

IBB confirmed to the committee that IIRO had two accounts at the bank, which were opened in 1993 and 1994, when IIRO was a non-governmental organization in good standing. It stated that after the IIRO was added to a United Nations sanctions list in 2006, it froze the accounts and reported them to the Bangladeshi Central Bank. In 2010, according to the bank, it received an ‘instruction from the Central Bank at the direction of the Ministry of Finance’ to unfreeze the accounts and ‘transfer the accounts’ to a government-owned bank, BASIC Bank, which it did.

In February 2010, HBUS AML compliance personnel reviewed the IBB account and recommended that the bank be designated a SCC, the reason given for the proposed SCC designation was IBB’s links to the Al Rajhi group, noting that the vice-chairman of the bank and 10 per cent owner was Yousif Abdullah Al-Rajhi, that Al Rajhi interests held about a third of the bank’s shares, and Al Rajhi itself had links to terrorist financing and the information provided in the 2006 FIG report, that the Bangladeshi Central Bank had issued a ‘notice of cause’ to IBB ‘to explain accounts owned by suspected Islamic militants’, and reportedly fined the bank for the third time ‘for covering up militants transactions’. Contrary to the outcome in 2006, HSBC designated IBB as an SCC client in 2010. Later in 2010, an Office of the Comptroller of the Currency AML Examiner reviewing emails related to Islami Bank characterized the information provided about the bank as depicting ‘extreme circumstances’, and recommended that the account be reviewed as part of a larger AML ‘look back’ effort at HSBC. In 2011, HSBC engaged in an extensive discussion with IBB regarding its AML policies and procedures, also noting in its KYC profile that the bank acted as a ‘payout agent’ for 53 money exchange businesses across the Middle East.

(Writer is former DG, DRI and former Member, CBIC )