Finance Minister AMA Muhith revealed a list of top 100 loan defaulters at the Jatiya Sangsad on Monday. According to Muhith, financial institutions in Bangladesh currently have defaulted on Tk1,11,347 cr. The spree of financial disclosure was a response to a query by MP Muhibur Rahman Manik. The list was dominated by institutions mostly, with only two individuals --- Emdadul Haque Bhuiyan and Mujibur Rahman Khan --- being mentioned.
The Finance Minister's list also contained double entries for Bismillah Towels Ltd and Jamuna Agro Chemicals. The minister was asked what the government was doing to combat money laundering. Muhith responded that the Bangladesh Financial Intelligence Unit had issued directives to financial institutions to establish a strong system and identify their clients to prevent money laundering.
Without mentioning the exact number of loan defaulters, the finance minister placed a list of top 100 loan defaulters prepared by the Credit Information Bureau of Bangladesh Bank. On June 20, Muhith informed the House that the total number of loan defaulters in the country was 2.02 lakh.
The amount of defaulted loans is really shocking, more than Tk 1 lakh crore having been drained off the public sector banks. The situation has almost destroyed the regulation of the country's financial sector. It seems that the defaulters consider the banks as free money withdrawal machines. The overall condition reveals the lack of a sense of responsibility of some top state-owned banks' management. Several high publicity loan scams have been observed which involve groups of companies that have doubtful past records.
The present situation clearly shows that the government has not dealt with the cases properly. The Finance Minister has promised that appropriate steps will be taken to restore basic banking discipline in order to deal with the matter of a lack of proper management in these financial institutions.
Yet nothing ever happened. We have observed the frequent involvement of political persons on the boards of banks, which situation contributes a lot to loan default. This total lack of proper action against defaulters and the framing of an appropriate policy has led to the present pathetic state of the state-owned financial institutions.
Only informing the people about loan defaulters is not enough. It is high time to form a special committee to handle the present crisis and trace the people behind loan default to bring them under justice so that the situation can't recur in future.
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