THE bad loans in the state-owned banks have risen by almost fourfold amidst series of loan scams where masterminds went scot-free mainly for inaction. The authorities have miserably failed not only to check the loan scams but also to contain the willful loan defaulters that led the defaulted loans to soar.
According to Bangladesh Bank data, the defaulted loans soared to Tk 80,307 crore in 2017 from of Tk 22,482 crore in 2009. The defaulted loan grew by about 176.5 per cent between 2009 and 2016 amidst detection of loan scams of Bismillah Group, Hallmark Group and BASIC Bank by the central bank and moratorium period at least twice during the same period. At the same time, the unprecedented $81 million reserve heist from the Federal Reserve Bank was committed while the investigation report is yet to published despite repeated assurances.
Available data stated that classified loans in six state-owned commercial banks – Sonali, Agrani, Janata, Rupali, BASIC and Bangladesh Development banks – increased to Tk 42,852 crore on June 30, 2018 from Tk 37,326 crore on December 31, 2017. Bismillah Group swindled about Tk 1,100 crore from state-run Janata Bank in 2012 while Hallmark Group misappropriated about Tk 3,500 crore from largest state-owned Sonali Bank in 2013.
Economists said the banking sector is in total disarray because of massive irregularities, lack of good governance and political interference. The defaulted loans already crossed double-digit mark creating uphill challenges for the policymakers. Undoubtedly, the Anti-Corruption Commission failed to bring any charge against BASIC Bank board of directors who in collaboration led the once profit-making bank to face almost bankruptcy.
The prevailing anarchy in the country’s economy would push the next government to face uphill task of restoring discipline in the financial sector infested with loan scams, growing bad loans and capital flights. The authorities must show willingness to punish the politically motivated directors responsible for shabby condition of the state-owned banks.
According to Bangladesh Bank data, the defaulted loans soared to Tk 80,307 crore in 2017 from of Tk 22,482 crore in 2009. The defaulted loan grew by about 176.5 per cent between 2009 and 2016 amidst detection of loan scams of Bismillah Group, Hallmark Group and BASIC Bank by the central bank and moratorium period at least twice during the same period. At the same time, the unprecedented $81 million reserve heist from the Federal Reserve Bank was committed while the investigation report is yet to published despite repeated assurances.
Available data stated that classified loans in six state-owned commercial banks – Sonali, Agrani, Janata, Rupali, BASIC and Bangladesh Development banks – increased to Tk 42,852 crore on June 30, 2018 from Tk 37,326 crore on December 31, 2017. Bismillah Group swindled about Tk 1,100 crore from state-run Janata Bank in 2012 while Hallmark Group misappropriated about Tk 3,500 crore from largest state-owned Sonali Bank in 2013.
Economists said the banking sector is in total disarray because of massive irregularities, lack of good governance and political interference. The defaulted loans already crossed double-digit mark creating uphill challenges for the policymakers. Undoubtedly, the Anti-Corruption Commission failed to bring any charge against BASIC Bank board of directors who in collaboration led the once profit-making bank to face almost bankruptcy.
The prevailing anarchy in the country’s economy would push the next government to face uphill task of restoring discipline in the financial sector infested with loan scams, growing bad loans and capital flights. The authorities must show willingness to punish the politically motivated directors responsible for shabby condition of the state-owned banks.
