A NATIONAL daily on Wednesday reported that the Finance Ministry has turned down a request from BASIC Bank for immediate recapitalization of the bank to protect the scam hit state- owned bank from falling into deeper trouble. News reports quoted the Finance Ministry officials as saying that the government is running short of fund this time to implement the new pay scale with arrears from July last. But BASIC Bank has showed the capital shortfall of Tk 3,050 crore from earlier scandalous loans calling for fresh bail out. The bank has so far received Tk 1,100 crore recapitalization during the last two financial years despite opposition from experts. We support the Finance Ministry’s turning down of the request, but in our view it is not enough. The government must stop recapitalization of state-owned banks to overcome loses from poor bank management and specially swindling of bank money by powerful people.
We don’t know why the government is using tax-payers’ money time and again to bail out banks without plugging the regular loopholes and many doubts where the money from earlier recapitalization has gone without helping to improve its condition. Bail out with tax-payers money occurs only seldom, it can’t be a routine matter and not only BASIC Bank, some other state-owned banks including Sonali Bank are regularly getting recapitalization fund raising question about the rationality behind it. Question also arises whether some vested quarters are regularly robbing the money that needs to be investigated and cleared.
BASIC Bank was systematically ruined from 2009 to 2014 when its highly corrupt and dishonest chairman was instrumental to swindle over Tk 4,500 crore from the bank using names of fictitious business firms. He was always protected by the government despite headlines in media reports about BASIC Bank’s loan scandals. He was even given extension twice as chairman of the bank when swindling was going on in full swing.
The bank lacked professional management and in sanctioning of loans its Board of Directors was either avoided on some occasions or Board Members collaborated by becoming beneficiaries of scandalous loans. Nothing was unknown from the notice of the Finance Minister when a very strong bank turned into a highly sick one. It was also not unknown to Bangladesh Bank officials; but they failed to restore discipline in the bank for the chairman was having strong backing from powerful quarters of the government.
Even the Anti-Corruption Commission (ACC) surprisingly exonerated the chairman from any wrong-doings although Bangladesh Bank’s investigation team squarely held him responsible for the crimes. The news for fresh recapitalization appears shocking to many and we are totally opposed to such misuse of tax-payers money for compensating others robberies and wrong-doings. There must be an end to it. A financial institution failing to properly run has no right to stay. It may be merged or liquidated to save public money.
We don’t know why the government is using tax-payers’ money time and again to bail out banks without plugging the regular loopholes and many doubts where the money from earlier recapitalization has gone without helping to improve its condition. Bail out with tax-payers money occurs only seldom, it can’t be a routine matter and not only BASIC Bank, some other state-owned banks including Sonali Bank are regularly getting recapitalization fund raising question about the rationality behind it. Question also arises whether some vested quarters are regularly robbing the money that needs to be investigated and cleared.
BASIC Bank was systematically ruined from 2009 to 2014 when its highly corrupt and dishonest chairman was instrumental to swindle over Tk 4,500 crore from the bank using names of fictitious business firms. He was always protected by the government despite headlines in media reports about BASIC Bank’s loan scandals. He was even given extension twice as chairman of the bank when swindling was going on in full swing.
The bank lacked professional management and in sanctioning of loans its Board of Directors was either avoided on some occasions or Board Members collaborated by becoming beneficiaries of scandalous loans. Nothing was unknown from the notice of the Finance Minister when a very strong bank turned into a highly sick one. It was also not unknown to Bangladesh Bank officials; but they failed to restore discipline in the bank for the chairman was having strong backing from powerful quarters of the government.
Even the Anti-Corruption Commission (ACC) surprisingly exonerated the chairman from any wrong-doings although Bangladesh Bank’s investigation team squarely held him responsible for the crimes. The news for fresh recapitalization appears shocking to many and we are totally opposed to such misuse of tax-payers money for compensating others robberies and wrong-doings. There must be an end to it. A financial institution failing to properly run has no right to stay. It may be merged or liquidated to save public money.
