AFTER Farmers Bank’s debacle failing to clear checks for fund shortage, which forced Bangladesh Bank to dissolve its board including removal of its chairman to grant emergency bail out funding, Bangladesh Industrial Finance Company (BIFC) failed this time to pay back Tk 31.73 crore to Rupali Bank. It is also insolvent to run normal banking. Meanwhile the NRB Commercial Bank also appears facing insolvency with huge bad loans to board members and their relatives. Bangladesh Bank is set to dissolve its board of directors any time to overhaul its management. Earlier People’s Leasing and Financial Services (PLFS) went red as several sponsor directors grabbed most of the fund leaving its coffer empty. Needless to say major state owned banks are now functioning mainly on regular recapitalization from budgetary allocations.
Insolvably of banks and financial institutions is increasingly stoking alarm signals for the country’s banking system and there is every reason to blame the government for the situation. The biggest factor hurting banks and financial institutions arises out of political shelter of the government to powerful people closer to power center. They grabbed their deposits including stealing of reserves from Bangladesh Bank in recent years openly enjoying impunity from prosecution.
In fact the entire banking sector – both public and private – is now sitting on huge bad loans and influential people in politics and owners of big corporate houses are withholding repayment under the cover of loan rescheduling. They are exploiting the window time and again to suggest that such delaying means denying repayment at convenient time at the end. Many justify rescheduling blaming poor business but it does not mean that they remain defaulter ever longer. Others say they are running mills and factories and creating new jobs for people as cover to defer repayment. There may be genuine reasons for some but it must be clear that banks and financial institutions run on the basis of profitability; they are not charity to fund rich people while many of them are removing this money out of the country.
Capital flight runs over several billion dollars per year and it can’t be inappropriate to say banks are catering in many cases depositors’ money to dishonest people for capital flight. Our banks and financial institutions are open to money launderers in absence of strong protection of law and effective monitoring. The country would have achieved many times higher growth if all that money were invested in the country.
Our banking system is plugged by sky rocketing corruption and irregularities and the government instead of tightening the nose is more opening up the system to money launderers amending banking laws that allow up to four directors now from a family to sit on the board. It is turning banks into family business widening risks to depositors’ money. We must say there is no alternative to punish the money launderers to save the banking system from collapse.
Insolvably of banks and financial institutions is increasingly stoking alarm signals for the country’s banking system and there is every reason to blame the government for the situation. The biggest factor hurting banks and financial institutions arises out of political shelter of the government to powerful people closer to power center. They grabbed their deposits including stealing of reserves from Bangladesh Bank in recent years openly enjoying impunity from prosecution.
In fact the entire banking sector – both public and private – is now sitting on huge bad loans and influential people in politics and owners of big corporate houses are withholding repayment under the cover of loan rescheduling. They are exploiting the window time and again to suggest that such delaying means denying repayment at convenient time at the end. Many justify rescheduling blaming poor business but it does not mean that they remain defaulter ever longer. Others say they are running mills and factories and creating new jobs for people as cover to defer repayment. There may be genuine reasons for some but it must be clear that banks and financial institutions run on the basis of profitability; they are not charity to fund rich people while many of them are removing this money out of the country.
Capital flight runs over several billion dollars per year and it can’t be inappropriate to say banks are catering in many cases depositors’ money to dishonest people for capital flight. Our banks and financial institutions are open to money launderers in absence of strong protection of law and effective monitoring. The country would have achieved many times higher growth if all that money were invested in the country.
Our banking system is plugged by sky rocketing corruption and irregularities and the government instead of tightening the nose is more opening up the system to money launderers amending banking laws that allow up to four directors now from a family to sit on the board. It is turning banks into family business widening risks to depositors’ money. We must say there is no alternative to punish the money launderers to save the banking system from collapse.
