AMID the widespread call for his dismissal from different corners of the society, Sheikh Abdul Hye Bachchu, the Chairman and prime suspect behind BASIC Bank’s fiasco, has finally stepped down. The resignation comes just two months before the end of his second term as Chairman of the bank.
The resignation signals the bank top brass’s complicity in the scam that made the bank stumble. One of the best-run banks until 2009, BASIC Bank has been mired in financial irregularities since Bachchu assumed office in 2009. During his tenure, the bank’s indicators-from capital adequacy ratio to nonperforming loans and credit rating-went on a free fall. Despite this dismal performance, Bachchu was offered a second term in office in 2012. In his second term as the chairman, the irregularities amounted to upwards of Tk 4,500 crore, according to Bangladesh Bank (BB). He is allegedly very close to the high ups of the ruling Awami League and reportedly he single-handedly controlled the bank and granted loans in defiance of the recommendations of the bank’s credit committee. In other words, loans were extended to defaulters, and there were instances where loans were issued even before clients opened their bank accounts. Mortgage prices were shown at inflated prices to allow clients to appropriate more money from the state-run bank.
But, this is certainly not the end of the problem, it could only be the beginning of the end. With the current condition of the banking sector – being troubled by scandals and open improprieties the quintessential question we face is, will the banking sector be able to recuperate its lost credibility and trust while finance minister Mr. Muhith and the regulatory authority Bangladesh Bank’s governing body is in the chair? Are they not responsible for the current mess? Is it credible that all these scandals had happened without the notice of these authorities? Even if their intentions were not wrong, can they deny the criminal inefficiency they have shown about the responsibilities they were endowed with?
Without a thorough reorganizing of all the publicly owned banks by freeing them from politically appointed officials the trust will never come back. The appointments should be based entirely on merit, professionalism and experience. Private banks are no safe havens either. But public banks are being treated by politically connected persons as easy preys. They feel free to plunder people’s money. And in most cases they go unpunished. Mere regulations cannot be enough because those who can violate regulations, they do the most crimes.
