Published:  02:25 AM, 25 January 2023

Expose top loan borrowers' details

Economists urge regulatory authorities

Expose top loan borrowers' details
The sum of defaulted loans in banks and financial institutions is increasing by leaps and bounds. Defaulted loans amounted to 1 lakh 25 thousand 257 crore taka at the end of June 2022, according to official figures.

Nevertheless, unofficial sources have informed that defaulted loans in Bangladesh have crossed 2 trillion taka including written off debts. Under these circumstances, worries have come up among the country's citizens about their money deposited in state-run and private banks.

Economists and financial experts have again and again urged the regulatory institutions to expose the list of top loan borrowers but neither Bangladesh Bank nor Finance Ministry has yet done so. Bangladesh Bank's Governor Abdur Rauf Talukder said a few months ago that the intervention in banks' operations by directors is harmful for the banking sector.

According to Bangladesh Bank (BB), the highest amount of defaulted loans is in Janata Bank. This bank is affected with defaulted loans of 17 thousand 263 crore taka at the end of June 2022. Agrani Bank's defaulted loans rose to 10 thousand 558 crore taka at the end of June 2022. Rupali Bank's defaulted loans amounted to 6 thousand 466 crore taka at the end of June 2022. Sonali Bank's defaulted loans reached 12 thousand 126 crore taka and Basic Bank's defaulted loans turned out to be 8 thousand 249 crore taka at the end of June 2022. Among private banks, National Bank is suffering most from defaulted loans. This bank is bogged down with defaulted loans of 9 thousand 394 crore taka till June 2022. One Bank's defaulted loans reached 2 thousand 793 crore taka at the end of June 2022. Islami Bank Bangladesh Limited's defaulted loans amounted to 4 thousand 511 crore taka. IFIC Bank's defaulted loans reached 2 thousand 327 crore taka till June 2022. Pubali Bank's defaulted loans reached 1 thousand 572 crore taka till June 2022.

Defaulted loans in some other private banks till June 2022 are as follows: UCB Bank-2 thousand 53 crore taka; NRBC Bank- 600 crore taka; Al Arafah Islami Bank-1 thousand 988 crore taka; AB Bank-4 thousand 346 crore taka; Uttara Bank-1 thousand 322 crore taka; Padma Bank-3 thousand 950 crore taka; Trust Bank-1 thousand 182 crore taka; NCC Bank-936 crore taka; Shahjalal Islami Bank-962 crore taka.

Trade deficit in Bangladesh has crossed 33 billion dollars which is highest in the country's history. At the same time Bangladesh government has borrowed nearly 99 billion dollars from internal sources. Moreover, the government has so far borrowed around 48 billion dollars from external sources. More money is about to be borrowed from the International Monetary Fund (IMF), World Bank and Asian Development Bank. Financial experts have stated that Bangladesh's economy may be paralyzed if the country fails to pay back the above loans and if trade deficit cannot be mitigated immediately.

The Managing Directors of different private banks in collaboration with some unscrupulous bureaucrats have created a vicious syndicate in Bangladesh's banking sector, financial sources have informed. This syndicate is allegedly responsible for most of the corruption and irregularities occurring in private banks for the most part.

The status of private banks was far better than state-owned banks in 2016 but later on the cobwebs of graft and anomalies clutched private banks too as a result of which incidence of loan frauds frequently happened in these banks. Economists have stated that Bangladesh Bank's present Governor Abdur Rauf Talukder should come up with strong initiatives to release banks from the grip of evil entities. Bangladesh Bank also needs to do some soul searching to find out its own shortcomings so that the central bank can function properly as the top regulator of banks and financial institutions.

Reportedly a number of government organizations are not being able to withdraw their big amounts of deposits from some private banks. The High Court remarked that most of the heinous financial crimes are being committed in the country's banking sector, according to a report by Daily Ittefaq published on 27 July 2022. In light of this report of Daily Ittefaq, the High Court further said that corruption in the banking sector is crippling Bangladesh. So, financial regulatory authorities including Finance Ministry and Bangladesh Bank should stop playing hide-and-seek games and should clarify to the nation the real scenario of defaulted loans.

The Asian Age published a report on the front page on 26 February 2017 titled, "Tk 30, 000 crore vanishing trick: 60% of defaulted loans from public banks written off." Taking this report into cognizance, the High Court ordered Bangladesh Bank to furnish full facts and figures related to the persons and amounts with reference to defaulted loans up to 31 December 2016.

Bangladesh Bank's former Governor Dr. Saleh Uddin Ahmed said that some wrong decisions of the central bank are responsible for the rising sums of defaulted loans in the country.

Former adviser to caretaker government Dr. Wahid Uddin Mahmud said, "The authorities concerned should work hard to constitute good governance and accountability in the banking sector so that depositor's money remains safe and secure. At the same time it is essential to keep banks away from political influence."
Dr. Ahsan H. Mansur, Executive Director of Policy Research Institute (PRI) said, "The central bank and other regulatory institutions should carry out firm and uncompromising drive to recover defaulted loans to sustain the country's banking sector. At the same time the safety of depositors' money has to be ensured."
Professor Anu Muhammad of Jahangirnagar University said, "Bangladesh's banking sector has gone into the clutches of financial perpetrators. Some of them are so influential that the regulators cannot take any action against them. The situation is like banks are gambling with depositors' money."
UNDP Country Economist Dr. Nazneen Ahmed said, "All banks are under obligations to keep the money of depositors in safe and sound shape. The regulatory authorities should not compromise with any bank or financial institution in case of graft and anomalies."

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