NEWS report published in The New Nation on Saturday said, state owned banks (SOBs) have a total outstanding loan of Tk 28,800 crore to big state owned enterprises (SOEs) as of January 31. It said Bangladesh Petroleum Corporation (BPC), which handles the nation’s fuel oil business, has alone the biggest loan overdue of Tk 9,338 crore followed by Bangladesh Power Development Corporation (BPDC), running the country’s power generation and supply, having a loan outstanding of Tk 7,108 crore to public banks. Four other public corporations sitting at the center of the national economy like BCIC, BADC, BJMC and BWDB have a total outstanding of Tk 6,062 crore to show that they are incapable to run business without spoon- feeding. The fact is that bank loan is a regular part of business, there is nothing wrong, but persistently failing to repay to allow the loan spill over to a highly disproportionate level is really alarming to banks and the corporate sector itself.
The report shows Sonali Bank alone has the biggest loan outstanding of Tk 14,000 crore followed by Janata Bank, Rupali Bank, Agrani Bank and BASIC Bank having together a loan outstanding of over Tk 14,800 crore. The question arises how banks can leave such huge loans to spill over without enough progress in recovery. Because, banks give loans and take back it to put the money again to new borrowers and this is how not only banks but also the economy thrives. But loan stuck up over a longer time is an alarm signal for loans turning into bad debts. It is already causing liquidity shortage in most banks affecting their lending.
What the report shows is that big government run corporations are failing to run the business from their budgetary resources making them heavily dependent on bank loans. Bangladesh Bank officials have been quoted in the report as saying that the Finance Ministry as the regulatory body of the SOBs is regularly forcing them to give loans to sector corporations and it is known to all that the government is doing it to cover its own failure to run the public sector regularly making losses. The situation has further aggravated when the government is using big corporate bodies to give jobs to party men and indiscriminately exploit its resources otherwise.
As we see there is hardly any accountability in running corporate bodies and it partly explains how the SOBs outstanding loans are so high without much progress in loan recovery and why the government is recapitalizing those banks with tax-payers money to stop them from becoming insolvent. The swindling of over Tk 3,500 crore alone from Sonali Bank’s Rupashi Bangla branch showed how vulnerable is the public banking system when SOBs loan spill over and swindling of their money is going hand in hand.
We must say, SOBs must be saved from loan spill over running to highly disproportionate level by forcing public sector corporations to repay and achieve financial capacity to run business. The corporate management of SOEs needs to be improved by ending the use of their resources to achieve political end.
