NEWS report on Friday in a national daily said that the finance ministry has agreed to inject Tk 900 crore into six cash-strapped public sector banks to beef up their capital shortfall. The finance ministry has approved the funds to respective banks on Wednesday last. Earlier scam-ridden Sonali Bank and Basic Bank were given Tk 1500 crore in December last as recapitalisation from the government exchequer to overcome financial crunch. In last fiscal year, Sonali Bank was recapitalised by Tk 1,995 crore, Rupali Bank by Tk 210 crore, and Agrani Bank and Janata Bank by Tk 1,081 crore and Tk 814 crore respectively. The current budget has an allocation of Tk 5,000 crore for recapitalisation of banks and the government is using the fund frequently to bail out cash trapped public sector banks. In fact, recapitalisation of public sector banks has become a regular phenomenon but the breaking of every such news comes as a regular reminder to taxpayers as to why the government must save banks failing to live on their own earnings. The norm is that either they must earn enough to exist or cease to exist; recapitalisation of commercial banks can’t be a regular budgetary matter. Question also arises as to why the government is funding banks ruined by corruption, inefficiency and swindling by vested interest groups. Why it is not tightening the control and supervision on management where transparency of loan operation is lacking and accountability is almost absent. Like Sonali Bank, Basic Bank was plundered mindlessly but the government gave it huge recapitalisation only six months back and another Tk 400 crore is on card. Why it is not putting the persons responsible for it including the former chairman on trial; is the big question. Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank similarly received huge recapitalisation in recent past and again demanding new funds. Many questions the viability of Palli Sanchay Bank, which is demanding Tk 125 crore fresh as recapitalisation fund. Set up last year as a politically prioritized project to overshadow Grameen Bank, it has hardly any other viability as such. Business viability of Bangladesh Karmasangsthan Bank and Ansar-VDP Unnayan Bank is also on serious question while they are demanding Tk 25 crore each. It appears that all six banks have a total of Tk 10,500 crore capital deficit and the amount approved this time is not enough, except to helping overcome their crisis in the short run. But the fact is that all these banks have yet bigger amount of loan overdue but powerful business houses and individuals closer to the ruling party are not paying back while managing regular rescheduling of the loans to avoid pressure for repayment. The government is thus taxing the taxpayers to shield its failure to run the economy and public sector banks in particular, because the political cost of their closure would be far greater. In fact, public sector banks have fallen victim to fraudulent business practices and to our sick political culture. There is no alternative to good governance to save the banks from predators’ hand.
