Update, October 2026 — The governance diagnosis offered at this 2021 dialogue has held up, though the remedy that arrived was narrower than the one being argued for. What was tried instead is below the original article.
A lack of good governance in the country is behind the embezzlement of e-commerce customers' money, Professor Rehman Sobhan, chairman of the Centre for Policy Dialogue (CPD), has said.
"E-commerce is not the first case. Such incidents had earlier taken place several times in the country and remained unresolved," he said during a virtual dialogue on "Challenges in the E-commerce sector: What should be done?" organised by the think tank on Saturday.
E-commerce entrepreneurs and experts said proper enforcement of existing regulations could help inject discipline in the burgeoning online trade. They opposed the government's plan to formulate a separate law and a regulator for this sector.
Moderated by CPD Executive Director Dr Fahmida Khatun, the dialogue discussed the recent growth, fraudulent behaviour of a number of e-commerce platforms, recent changes in policies, and ways to overcome challenges.
Waseem Alim, co-founder and chief executive officer (CEO) of the country's top online grocery shop Chaldal, said it took four-five years for the firm to gain people's trust, and after the recent cases related to taking advances from customers and not delivering products or refunding their money, online businesses are being hurt as they find it tough to gain the confidence of new customers.
Like other countries, Bangladesh does not need a separate act and a regulator to govern e-commerce businesses, he opined, adding that increased monitoring by existing government authorities would work better to bring about discipline in the sector.
Fahim Mashroor, founder of a first-generation e-commerce platform Ajkerdeal, said the Directorate of National Consumer Rights Protection (DNCRP) should be strengthened and made accountable.
The Bangladesh Bank failed to prevent financial anomalies in e-commerce despite the fact that the transactions took place within its jurisdiction. The central bank's indifference was apparent, he added.
Three years ago people linked to the industry warned the government about the risk of a situation of the kind that has lately emerged.
"We had pointed out a lack of transparency and issues within the business model of Evaly and other similar platforms, and no action was taken then," said Abdul Wahed Tomal, general secretary of the e-Commerce Association of Bangladesh (e-CAB).
There is a lack of coordination between the DNCRP, the commerce ministry, the Bangladesh Bank, and other stakeholders, he observed.
The country has laws to ensure consumer protection and fair competition, and the existing laws could solve the problems, observed Barrister Tanjib-ul Alam.
A lack of capacity of the relevant institutions and enforcement of the laws is apparent, said the legal expert.
He said since the industry does not feel the need for a separate act and a new regulator, the government should not go for these as new institutions might further undermine the relevance of the existing ones.
Md Ziaul Haque Bhuiyan, chief of staff of the business-to-business e-commerce ShopUp, questioned the banking sector's role in preventing financial misconduct in e-commerce as large transactions to defraud customers have taken place through the banking channel.
He urged strong monitoring of e-commerce activities.
Echoing other speakers, Waseem Alim said the problem is not with e-commerce; it has rather been observed in many sectors in Bangladesh that some people can take advances from people on the promise of delivering something and later failing to live up to their commitments.
He mentioned commodity and real estate sectors as instances.
With the rapid adoption of technology, e-commerce turnover in Bangladesh is doubling each year nowadays and is set to grow further.
More than 1,000 e-commerce platforms with membership of e-CAB and several million social media-based small online sellers are working here to generate at least Tk8,000 crore in annual sales, with a forecast being there for Tk25,000 crore in the next three years, Dr Fahmida Khatun said.
While the industry has been working for a stronger e-commerce ecosystem across the country, some errant sites such as Evaly, Dhamaka, and E-orange enticed millions of people into paying them in advance for big-ticket products like electronics, two-wheelers, and even cars with some insane discounts being as high as 50%.
They were pretending to pursue their growth ambitions through topline wars, but the reality is they were burning the advances from customers and credits from suppliers by embracing a model of Ponzi Schemes.
Now the platforms owe billions of taka to their customers and merchants and with no remedies in sight, some of the people defrauded have sued them.
Seeing the key people of the companies in jail or absconding, customers and merchants are more worried about their money nowadays, while the government is not confident if the site owners can pay back people's money.
Selim RF Hossain, managing director of Brac Bank, said what happened in some e-commerce sites was due to mistakes by every stakeholder and now it is most important to recover the money of the people defrauded.
What was tried instead
Governance arguments of this kind call for institutions to work better — for oversight to be independent, for regulators to act on what they see, for failures to be accountable. That is the correct diagnosis of why the collapses were possible, and it is extremely hard to act on, because an institution that is not functioning cannot be ordered to start functioning.
What was done instead avoided the institutional problem rather than fixing it. Customers' advance payments were moved out of the sellers' reach: money now sits with the central bank until goods are delivered, and the obligation to make that happen was put on the licensed payment institutions rather than on an oversight body.
That approach does not require anyone's governance to improve. It works whether or not the supervisory culture changes, which is both its strength and the reason it leaves the underlying criticism untouched.
Where the governance gap still shows
Two places, and they are the parts a payments rule cannot reach.
Recovery. After the commerce ministry asked Bangladesh Bank to begin returning money, it turned out that no agency held a usable record of which companies were under suit. That is precisely the coordination failure a governance critique predicts — several bodies each holding part of a picture, none responsible for assembling it.
Within four weeks of being asked, the High Court required the finance, commerce, information and home secretaries, the Governor of Bangladesh Bank, the ACC chairman and the head of the Bangladesh Financial Intelligence Unit to establish whose negligence had allowed the schemes to run. The need for a court to order officials to determine which officials had failed is itself the argument being made in this article.
Enforcement reach. Convictions were obtained where defendants could be tried, and the principals of two of the largest platforms were reported to be living abroad. Domestic institutions reach domestic assets; the design of the schemes anticipated that.
Why the distinction matters beyond this case
Reform after a scandal almost always proposes better institutions, because that is the honest reading of what went wrong. It is also the slowest available remedy and the one most dependent on sustained political attention.
Structural fixes — changing what is physically possible rather than what is permitted — are cruder and more durable. They work while nobody is watching, which is most of the time. The trade-off is that they do nothing for the people already harmed, and they leave the institutions that failed exactly as capable, or incapable, as they were.
On the evidence of the five years since, both halves of that sentence turned out to be true here.
