The five-member joint team comprising Maud Bokkerink, Marlene Manuel, Cheong-Ann Png and Maureen Sanders from the International Monetary Fund and Mark Butler from the World Bank (WB) came to Bangladesh on January 21.

Sources said following a series of talks in the last 11 days with quite a few organisations on prevention of money laundering, ending terror financing and boosting the remittance inflow, the team yesterday came up with the recommendation in a report submitted to the Bangladesh Bank (BB).

The volume of illegal remittance inflow is more or less equal to the amount of money that enters the country through legal channels, maintained the team. The government and the central bank have tried time and again through a wide range of measures to clog the illegal money transfer, but for little success.

Against this backdrop, the IMF-WB delegation prescribed licensing the hundi traders to allow them run the business legally. It also mentioned that Pakistan, United Arab Emirate and the UK have done the same.

The team also suggested giving licences for transferring money directly to the private money-transfer agencies, like Western Union, that now transfer their clients' money into or out of the country through banking channels.

If it is done, the remitters will get more competitive currency exchange rates and the country's foreign exchange reserve will also be healthier, the team argued.

However, the BB pointed out that legalising the hundi trade would be contrary to the existing anti-money laundering law as well as the foreign exchange regulations.

Since its arrival, the team has discussed a wide range of issues including the proposed money laundering and terror financing prevention act and the financial intelligence unit with the central bank and made some recommendations on them. Sources said after getting the Bangladesh Bank's feedback, the IMF and the WB would decide their country assistance policy.