Anti Corruption Commission (ACC) has sent a letter to Financial Institutions Division seeking to know about the progress with the implementation of the recommendations from ACC about writing off loans. ACC recommended several points about written off loans but ACC still has not received any information from the authorities concerned about the execution of those points.
It may be added that different banks write off bad loans to show less amounts of defaulted loans in their calculation books. Written off loans are not shown with defaulted loans. Written off loans are added to a different registry.
It is an artificial way to make banks look good. Financial experts have said that showing lower figures of defaulted loans by hiding written off credits is an unethical method. Reportedly 48 thousand 192 crore taka loans were written off from 2003 to 2017. 2, 674 crore taka loans were written off last year. ACC wanted to know in what ways such a huge sum of loans was written off. ACC also presented some recommendations over this issue.
Relevant sources have informed that ACC Secretary Dr. Shamsul Arefin stated in a letter to Financial Institutions Division that Cabinet Division was requested to give necessary directives to materialize the recommendations from ACC.
Cabinet Division requested Financial Institutions Division to scrutinize and implement the recommendations with required measures. Financial Institutions Division was requested to inform ACC whether any efforts have been made to implement the recommendations from ACC but no such message has been yet conveyed to ACC from Financial
Institutions Division.
An official from Financial Institutions Division has told media that the recommendations from ACC are being examined. ACC would be notified after the scrutiny is over, he further said.
Sources from Bangladesh Bank have reported that 2674 crore taka loans were written off during last year only. Reportedly 25 banks took advantage of writing off loans last year. AB Bank was on top of these 25 banks. AB Bank wrote off 328 crore taka loans last year. Prime Bank wrote off 206 crore taka loans. I
FIC Bank wrote off 152 crore taka loans. During 2003 to December 2017 state-owned banks wrote off 22 thousand 615 crore taka loans while private banks wrote off 23 thousand 992 crore taka loans during the same timeframe. At present the total sum of defaulted loans has amounted to 89, 340 crore taka. With written off credits added, the figure of defaulted loans exceed 1,44,651 crore taka.
Professor Dr. Abul Barakat said to The Asian Age, "It is not clear on what basis loans are being written off by banks. All state-owned and private banks should keep Bangladesh Bank informed officially and accurately about the amount of written off loans, reasons behind writing off loans and names and particulars of the concerned clients. Writing off loans without legitimate grounds and without proper clarification to the central bank is a breach of banking ethics."
Dr. Ahsan H. Mansur, Executive Director of Policy Research Institute (PRI) told The Asian Age, "Most of the time influential clients exercise political power on banks to get their loans written off. There is lack of transparency in the process of writing off loans. Bangladesh Bank and Finance Ministry have the authority to ask banks for detailed facts and figures regarding the loans which have been so far written off."
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