The actual size of bad loans is more than double the officially recognised figure, according to a report of the International Monetary Fund — a damning evidence of the fragile state of Bangladesh’s banking sector.
The report was prepared at the request of the government. A specialised mission of the IMF’s Monetary and Capital Markets Department visited Bangladesh for a diagnostic review of Bangladesh’s banking sector and came up with 43 suggestions for reforms.
There seems to be a deep-seated pattern of non-payment of loans by certain segments of the population. Technical discussions with the authorities have led the mission to believe that certain well-connected and rich businessmen have understood clearly that “there is no palette to enforce repayment of their loans”, the report said.
The persons who should be condemned most are the direct looters of public money but they are not much discussed. We want to insist that non-businessmen looters of thousand crores of taka should first be asked to return the money. That is not to happen easily because bank robbery is associated with highly placed persons in the government.
Back in 2015, the 11 top default loan businesses had committed to meet a number of conditions under a special package to get their loans restructured. One of the conditions was that they would be marked as defaulters if they failed to pay two consecutive installments.
If that happened, the benefit would be cancelled and they would be barred from any loan rescheduling benefit in future. But the concession could not be availed because most of the loan defaulters are in jail or left the country in fear of money laundering cases started unnecessarily to put them behind the bars.
Many things could be done to lower the size of these debts. One of the most important steps should be not to treat the loan default as a criminal act, which is actually not. It is a civil debt and the loan takers are not criminals as bank robbers and looters.
They should not have been put in jail or gone abroad in fear of imprisonment. The government is surrounded by incompetent wise persons to destroy the government and to destroy the country’s economy.
So there is no scope for negotiating a settlement. We think foolishnesses of clever people in the government are continuing the crisis to the detriment of the country’s economy.
Never before, an incompetent government of such magnitude was found. Their policy is not to make the economy working but protecting the looters.
The government permitted many frauds with no investment of their own to open too many new banks only to help them make money through outright cheating the people.
Now fear has been expressed that many banks will go bust and depositors will likely to lose all of their deposited money. The depositors will get taka one lakh only against every crore taka deposited. The rest will depend on sell-off assets of these banks.
The bank directors themselves too have taken thousand crores of taka as loan. In fact, the fraudulent new banks have been started for committing frauds. They gave loans against fraudulent assets. So the banks will have no assets to satisfy the demand of depositors.
We cannot tolerate the depositors to be cheated for the gains of bank directors. We know and others also know that the bank directors could easily violate the regulation to reap the banks. Some directors led kingly life style with banks’ money. They must first be asked to return the money they took as loans.
The directors are trustees of public money. They do not own the money for giving away as gifts to please others in their self-interest or show self-importance.
We are urging Bangladesh Bank to take urgent steps against the banks sure to go winding up. We want to see directors to be held fully responsible for paying the depositors honest money.
If needed, the directors of such failed banks should be barred from leaving the country.
