‘Culprits in financial sector aren’t sitting idle’

Khandaker Ibrahim KhaledFile photo

The banking sector was in a bad shape before. Incidents of corruption, irregularities and various scams remained hidden for a certain period. These are coming to the fore again. A syndicate involved in financial scams and defaulted loans has become active to make fortune using the coronavirus outbreak.

The incentives the government has disbursed during the COVID-19, are mainly based on bank loans. This will further intensify the crisis of the banks. One thing must be taken into consideration whether the move to provide incentives through banks are fully possible or not. The banks are in liquidity crisis. Moreover, it is a big challenge to reach these incentives to the real recipients.

One thing must be kept in mind that general people do not think top level people in the government are involved in such irregularities, corruption and scams in the banking sector. It would send a wrong message to the people. The corrupt people should in no way be spared during the coronavirus crisis.

No bank has so far collapsed. Several, however, are on the brink of destruction. There is a so big scam in Basic Bank, but the bank's chairman appointed by the government has not been brought to book. He has allegedly looted 80 per cent of the money from the bank.

Farmers Bank's chairman, who was a former minister, and a group of frauds including Chisty backed by the minister embezzled millions of taka from the bank.

These corrupt people have even finalised all processes to come out of jail by halting the trial procedure. Now Farmers Bank itself is struggling to survive by changing its name. These influential persons are controlling the Anti-Corruption Commission (ACC) too.

The ACC has accomplished some good tasks. Sometimes, the watchdog is unable to catch corrupt people in the financial sector. A certain quarter in the government is also patronising the frauds.

Other than Basic Bank and Farmers Bank, the financial scams by the Hallmark Group, Crescent Group, Destiny, Jubok and several other financial organisations have pushed the banking sector to a dire state.

The loan defaulters and financial sector culprits are not sitting idle. Recently, the death threats to the Exim Bank managing director and additional managing director have shaken the banking sector. It was reported that the directors were tortured for rejecting loan approval. A case has been filed in this connection. The accused fled the country through a special arrangement amid the coronavirus pandemic.

People become frustrated in such an incident and they want to see strict measures. As it sends signals to others not to dare to commit such crimes.

One thing must be kept in mind that general people do not think top level people in the government are involved in such irregularities, corruption and scams in the banking sector. It would send a wrong message to the people. The corrupt people should in no way be spared during the coronavirus crisis.

The income of banks will decrease for fixing bank interest rate at 9 and 6 per cent. Four members of a family instead of two have been allowed to become bank directors, and the tenure of a director has been raised to 9 years from 6 years. Such changes will deepen the internal crisis of banks further.

At the moment, it is necessary to form a banking commission or a top-level probe committee to rescue the banks.

*This piece was prepared by Sharifuzzaman as he talked to Khandaker Ibrahim Khaled, prominent Bangladeshi economist and former deputy governor of Bangladesh Bank.