Badrul Ahsan :
New generation banks are allegedly spending much in the name of corporate social responsibility (CSR) fund to collect deposits and to evade taxation.
Banking sector insiders say these new banks donate cash and different types of instruments to different government, semi-government and autonomous bodies who are compelled to deposit a certain amount in banks every year.
Authorities of these banks donate the amount or instruments on conditions of giving deposits to their banks.
A recent study carried out by the Bangladesh Institute of Bank Management (BIBM) pointed out that such spending was 205 percent of the banks’ previous year’s net profit.
CSR fund spending by these private sector banks
aim at tax-dodging, the study also found. The BIBM study was released at a recent seminar in the city.
It was carried out by a four-member BIBM team led
by its Associate Professor Sohail Mustafa.
Bangladesh Bank guidelines allow banks to spend 10 percent of their net profit on CSR fund, but the report found that NRB Global Bank spent 205 percent in 2016, which was unusual.
In 2015, Union Bank spent 99 percent, Midland Bank 92 percent and NRB Global Bank 35 percent. In 2014, NRB Global spent 49 percent, NRB Commercial 37 percent and Union Bank 15 percent.
“We have observed some banks specially the new ones are using their CSR money to collect deposits,” a General Manager of Bangladesh Bank (BB) told The New Nation, preferring anonymity.
The BB official warned these banks of stern action if such ill-practice is continued by them.
SK Sur Chowdhury, BB Deputy Governor, said allegations relating to use of CSR fund against nine new commercial banks are wingspread. Two-three of them are in deplorable condition and the central bank is watching them, Chowdhury added.
In response to a query, Khondkar Ibrahim Khaled, a former deputy governor of BB, said the new banks are doing unethical activities.
“The government should keep watch on activities of the new banks, including usage of CSR fund, deposit collection, loan sanctions to avoid any unexpected situation and wrong-doing,” he said.
However, this noted economist said there is nothing to be worried as a very small amount of loans these banks sanction has turned defaulted.
Khaled also expressed dismay over the number of new banks.
“The number of banks is more than the size of Bangladesh economy,” he opined.
The licences of the banks showing bad performance should be cancelled, he suggested.
New generation banks are allegedly spending much in the name of corporate social responsibility (CSR) fund to collect deposits and to evade taxation.
Banking sector insiders say these new banks donate cash and different types of instruments to different government, semi-government and autonomous bodies who are compelled to deposit a certain amount in banks every year.
Authorities of these banks donate the amount or instruments on conditions of giving deposits to their banks.
A recent study carried out by the Bangladesh Institute of Bank Management (BIBM) pointed out that such spending was 205 percent of the banks’ previous year’s net profit.
CSR fund spending by these private sector banks
aim at tax-dodging, the study also found. The BIBM study was released at a recent seminar in the city.
It was carried out by a four-member BIBM team led
by its Associate Professor Sohail Mustafa.
Bangladesh Bank guidelines allow banks to spend 10 percent of their net profit on CSR fund, but the report found that NRB Global Bank spent 205 percent in 2016, which was unusual.
In 2015, Union Bank spent 99 percent, Midland Bank 92 percent and NRB Global Bank 35 percent. In 2014, NRB Global spent 49 percent, NRB Commercial 37 percent and Union Bank 15 percent.
“We have observed some banks specially the new ones are using their CSR money to collect deposits,” a General Manager of Bangladesh Bank (BB) told The New Nation, preferring anonymity.
The BB official warned these banks of stern action if such ill-practice is continued by them.
SK Sur Chowdhury, BB Deputy Governor, said allegations relating to use of CSR fund against nine new commercial banks are wingspread. Two-three of them are in deplorable condition and the central bank is watching them, Chowdhury added.
In response to a query, Khondkar Ibrahim Khaled, a former deputy governor of BB, said the new banks are doing unethical activities.
“The government should keep watch on activities of the new banks, including usage of CSR fund, deposit collection, loan sanctions to avoid any unexpected situation and wrong-doing,” he said.
However, this noted economist said there is nothing to be worried as a very small amount of loans these banks sanction has turned defaulted.
Khaled also expressed dismay over the number of new banks.
“The number of banks is more than the size of Bangladesh economy,” he opined.
The licences of the banks showing bad performance should be cancelled, he suggested.
