The Chairman was removed at last in 2014 when the bank was on the brink but the government is yet to bring any charge against him and other board members. The bank is functioning now as we know on regular recapitalization basis from budgetary allocation which is not however a financially viable way to run a bank. Many believe the government is not ready to accept the closure of a bank taking the political blame for bankruptcy. Almost all public banks are sick and suffering from capital shortfall. The government is planning to pump Tk 15,000 crore to bail out them in next three years. But the critical question is why and how long will banks run with tax-payers money; why the government is giving exit to people who sanctioned loans against fake projects. In some estimates BASIC Bank alone lost over Tk 4,500 crore in fake loans.
It sounds strange that some vested quarters are bringing pressure on the government to allow the bank to issue bonds to beef up its capital base. But as it appears, the Finance Ministry has so far twice rejected such pressure because protection to such fund may be very difficult given the way powerful people had earlier swindled the bank. Meanwhile the government has pumped Tk 1,100 crore to the bank’s coffer in 2014 and Tk 1,200 crore in January 2016 from the budgets when the bank’s non-recoverable loan stood at Tk 8,105 crore in December 2014 and Tk 6,581.15 crore in 2015.
As it appears the banking sector in Bangladesh provides the easiest way of minting fortune overnight and there is no practical bar taking the money out of the country to safe haven. We must say piecemeal measures such as issuing of bonds or budgetary help will not save our banks, only punishment of swindlers and enforcing financial laws can stop further robberies and save the banks.
It is no secret that not only BASIC Bank, Sonali Bank, Agrani Bank and over half a dozen other state-owned banks and financial institutions were thoroughly robbed by powerful people under political shelter over the past several years. Even Bangladesh Bank fund was swindled from its New York reserves and it is no secret that powerful people from within the bank were involved.
We must say banks and financial institutions must run their business on corporate basis. They can’t be run with state money. Politically motivated management only destroys them.
