FBCCI President Sheikh Fazle Fahim
Sheikh Fazle Fahim, President of Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) has said that the inactivity of Bangladesh Bank (BB) is responsible for corruption and irregularities in the country's banking sector.
He further said that Bangladesh Bank is not enforcing its power and authority to rectify banks.Most of the banks are inflicted with insurmountable amounts of defaulted loans.
Loan scams and financial rackets have hammered banks. Bangladesh Bank has failed to carry out its duties as an independent organization.Sheikh Fazle Fahim made these remarks on 25 November while speaking to a news agency.
He said that the central bank did not exercise monitoring over the functionalities of different banks which is why anomalies and graft have engulfed the banking arena. He added that a certain group of individuals are getting hold of most of the privileges on banking and financial turfs in a monopolistic way.
Most of the banks could not bring down loan interest rate to single digit. Liquidity crisis and capital deficit have hit banks hard. As a result people's confidence on banks is going down.
The magnitude of defaulted loans is not at all coming down. The amount of defaulted loans has increased by 3 thousand 863 crore taka during the first three months of the ongoing fiscal year.
Bangladesh Bank's information shows that the figure of defaulted loans was 1 lakh 12 thousand 425 crore taka at the end of June of 2019-2020 fiscal year. However, it has increased to 1 lakh 16 thousand 288 crore taka (1.16 trillion taka) at the end of September 2019-2020 fiscal year.
On the other hand, financial sources have informed that the true extent of defaulted loans is very close to 2 trillion taka including written off debts. Financial experts have suggested that certain reforms in the banking rules are required to stop the rise of defaulted loans and to recover defaulted loans from borrowers.
Finance Minister AHM Mustafa Kamal said on 10 January 2019 that defaulted loans would not increase by one single taka but defaulted loans have augmented by 3 thousand 863 crore taka till September this year.
Analysts have said that there is no good governance and accountability in the country's banking sector. Allegedly influential loan defaulters dictate Bangladesh Bank which is why the central bank cannot execute any measures to recover defaulted loans. As a result financial scams and corruption are going on without cease in the banking arena of the country.
Powerful loan defaulters often escape through the loopholes of banking regulations and thus they get their loans rescheduled ten to twelve times.
The ailing condition of the banking and financial sectors has caused perils to share markets too. Share prices have nosedived causing widespread disappointment and anger among the people. Economists have expressed worries that there might be a mass uprising if the government cannot rescue banks and stock markets from the ongoing predicaments.
Besides defaulted loans, money laundering from Bangladesh is also going on rampantly. Washington-based organization Global Financial Integrity (GFI) unfolded in January that 590 crore dollars or nearly 50 thousand crore taka was laundered from Bangladesh to overseas destinations during 2015 while 911 crore dollars or 76 thousand crore taka was laundered abroad from Bangladesh during 2014.
Bangladesh held 19th place in the world in 2015 in terms of capital flight or money laundering according to GFI.Bangladesh's trade deficit has in the meantime amounted to 178.40 billion taka which is the highest in the country's history.
The United Nations Conference on Trade and Development (UNCTAD) recently stated that most of the money laundering happens through false export and import documents. UNCTAD also informed that the amount of laundered money in 2015 is equal to Bangladesh's 36% total tax revenue of that year.
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