Editorial Desk :
The total amount of default loans with our public banks now reportedly stands at Tk 63,300 crore till the end of June last year and it is even getting bigger. In spite of repeated rescheduling of many unrecovered big loans, chances are slim that much of it can’t be recovered. In the face of such frightening financial scenario when the media is abuzz with alleged banking scams – the burning question often arises how do the bad loans got so easily sanctioned? And why the banking mechanism to recover them is not working?
Indisputably true, loan seekers most of the time misuses or abuses the loan money either by spending on keeping them in different saving schemes or by laundering abroad unlawfully but then again halting the industrial sector by shutting industrial enterprises necessarily doesn’t ensure the recovery of bad loan either. Taking full advantage of the situation, a number of private companies now have called for more new loans on top of previous unpaid ones. They have even indirectly threatened to close their business if the new loan requests were not realized. We are missing the close integration of banks with our businesses too.
However, besides failing to recover bad loans, rescheduling of loans on political consideration and inefficient and corrupt bank management as we are witnessing now has made the sector a victim of utmost lawlessness.
It is right in here, where we observe the unholy nexus of organized crime by both lender and the loan takers. Not only the numerable directors, managers and politically appointed post holders undetectably help dubious loan applicants to apply and get the loans sanctioned, they also deliberately show them the banking loopholes how to get away with it. Unquestionably, the defaulters’ accomplices in banks don’t do it for free. The root cause of the massive financial corruption as far within the inner circles of state-owned banks, the need of the minute is to address it right away.
In recent times, Hallmark and Bismillah Group’s financial scams, which started mainly at state-owned commercial banks, have demonstrated cracks in the management of these banks. From the Board of Directors to the management down to lower level officials, these banks have not shown any sign of good governance, transparency and accountability.
More pointedly, far way back in 2012, the virtually unknown Hallmark Group at that time was granted more than 3.5 thousand crore loan from Sonali Bank. The disbursement raised questions about its legality. It was soon found that the company didn’t deserve the loan, had no adequate collateral while the owner had little credibility, yet the company obtained massive loans that the bank can’t legally lend. It was later found that not only the bank manager, but also the board of management were involved which later resulted in the biggest loan scam in banking history.
So on the topic of bad loans – besides defaulters we also see how the lending authorities are also closely involved directly or indirectly in financial crimes.
Also, a relatively less reported phenomenon is the relaxed approach to recovery of loans at times bordering on an over-zealous approach to write off loans of public banks by powerful quarters. That said – quite often it has been alleged how the top-brass or Board of Directors of public banks have often been involved in arranging loans for dubious applicants despite knowing that chances of recovery are slim.
It thus becomes a scenario where the savior becomes the predator. In this regard, high powered monitoring officer to oversee violation of the Legal Advisor’s advice and resolution of the Board and vigilance of Bangladesh Bank authorities can actually ensure that defaulters would not get their way. We have so far witnessed no such preventable measure adopted in this regard.
Banking sector is one among the most corrupt sectors. But nobody is interested in saving the banking sector for honest financing of economic development.
The total amount of default loans with our public banks now reportedly stands at Tk 63,300 crore till the end of June last year and it is even getting bigger. In spite of repeated rescheduling of many unrecovered big loans, chances are slim that much of it can’t be recovered. In the face of such frightening financial scenario when the media is abuzz with alleged banking scams – the burning question often arises how do the bad loans got so easily sanctioned? And why the banking mechanism to recover them is not working?
Indisputably true, loan seekers most of the time misuses or abuses the loan money either by spending on keeping them in different saving schemes or by laundering abroad unlawfully but then again halting the industrial sector by shutting industrial enterprises necessarily doesn’t ensure the recovery of bad loan either. Taking full advantage of the situation, a number of private companies now have called for more new loans on top of previous unpaid ones. They have even indirectly threatened to close their business if the new loan requests were not realized. We are missing the close integration of banks with our businesses too.
However, besides failing to recover bad loans, rescheduling of loans on political consideration and inefficient and corrupt bank management as we are witnessing now has made the sector a victim of utmost lawlessness.
It is right in here, where we observe the unholy nexus of organized crime by both lender and the loan takers. Not only the numerable directors, managers and politically appointed post holders undetectably help dubious loan applicants to apply and get the loans sanctioned, they also deliberately show them the banking loopholes how to get away with it. Unquestionably, the defaulters’ accomplices in banks don’t do it for free. The root cause of the massive financial corruption as far within the inner circles of state-owned banks, the need of the minute is to address it right away.
In recent times, Hallmark and Bismillah Group’s financial scams, which started mainly at state-owned commercial banks, have demonstrated cracks in the management of these banks. From the Board of Directors to the management down to lower level officials, these banks have not shown any sign of good governance, transparency and accountability.
More pointedly, far way back in 2012, the virtually unknown Hallmark Group at that time was granted more than 3.5 thousand crore loan from Sonali Bank. The disbursement raised questions about its legality. It was soon found that the company didn’t deserve the loan, had no adequate collateral while the owner had little credibility, yet the company obtained massive loans that the bank can’t legally lend. It was later found that not only the bank manager, but also the board of management were involved which later resulted in the biggest loan scam in banking history.
So on the topic of bad loans – besides defaulters we also see how the lending authorities are also closely involved directly or indirectly in financial crimes.
Also, a relatively less reported phenomenon is the relaxed approach to recovery of loans at times bordering on an over-zealous approach to write off loans of public banks by powerful quarters. That said – quite often it has been alleged how the top-brass or Board of Directors of public banks have often been involved in arranging loans for dubious applicants despite knowing that chances of recovery are slim.
It thus becomes a scenario where the savior becomes the predator. In this regard, high powered monitoring officer to oversee violation of the Legal Advisor’s advice and resolution of the Board and vigilance of Bangladesh Bank authorities can actually ensure that defaulters would not get their way. We have so far witnessed no such preventable measure adopted in this regard.
Banking sector is one among the most corrupt sectors. But nobody is interested in saving the banking sector for honest financing of economic development.
