Tk 92,261 cr looted thru’ 24 banking scams in 15 years

Amount is 12pc of budget: CPD

Staff correspondent: In the last 15 years from 2008 to 2023, at least 24 major financial scams have occurred in the country’s banks. Over Tk 92,261 crore have been lost through this. This amount is 12 percent of the last fiscal year’s budget. On the other hand, defaulted loans have increased to Tk 1 lakh 82 thousand 295 crores.
Fahmida Khatun, executive director of CPD, presented this information at a media briefing on ‘What to do to restore good governance in the banking sector’ at the Center for Policy Dialogue (CPD) office in Dhanmondi, capital, on August 12. CPD Honorary Fellow Professor Mostafizur Rahman and Research Director Dr. Khandakar Ghulam Moazzem were present.
Urging to take some steps to turn around the bank now, Fahmida Khatun said, if this is done, we can improve a large part of the economy.
She identified institutional weakness in banking institutions, undermining the independence of the central bank, granting licenses to private banks without complying with regulations as the main problems of the banking sector.
The executive director of CPD also said that there are institutional weaknesses in the banks. Selection of board members, bank loan sanctioning process, compliance with international standards are weak. The central bank has completely lost its independence. There is a duality of administration here. Financial institutions are created to regulate central banks, there is no need for them.
No trial and analysis has been done in granting license to private banks. Through this, bank license is given for the creation of self-interested classes. These banks have no capacity. They are again recapitalized with government money. What a waste of government money.’
She said, they have created an oligarch among private sector banks. A few are controlling the entire banking sector. They control the central bank. Formulating policies. Many cases of defaulted loans have piled up. Banking is getting weaker, because the Banking Companies Act is changed. A lot of defaulters get out because of loopholes in the law.
The executive director of CPD said that in the last 15 years, the administrative officials including the governor of Bangladesh Bank have violated many rules to give benefits to special groups, as a result of which thousands of crores of taka have been given to a special group. She demanded the punishment of those involved in it.
Fahmida Khatun said, the policies taken by those who have performed the administrative duties of Bangladesh Bank, i.e. those who were the governors in the last 15 years, are in conflict with the banking norms. They have bent many rules to favor special groups. These should be investigated. Those involved in this need to be brought under punishment.
Stating that the amount of defaulted loans is increasing, the economist also said that in 2009, the amount of defaulted loans was Tk 22,481 crores, which stood at Tk 1 lakh 82 thousand 295 crores till March of this year. The investigation into the theft of Bangladesh Bank’s reserves in 2016 is still going on. The CID took 79 times to complete the investigation.
Fahmida Khatun, demanding the abolition of the financial department in the Ministry of Finance, said that there is a Financial Institutions Department (FID) in the Ministry of Finance. As a result, Bangladesh Bank can’t function independently. The real purpose of its creation is to influence banking. We think there should be an inquiry into the wrongful lending or wrong decisions that have been taken. Our recommendation is that FID should be closed, there is no need for this category.
CPD Honorary Fellow Professor Mostafizur Rahman said, we had moral support in the students’ movement. We were in the students’ liberation march. We are nothing to those who have sacrificed themselves. A white paper on corruption in the financial sector should be prepared. Accountability should be ensured in the bank.
Research director of CPD Dr. Khandkar Golam Moazzem said the challenges of the banking sector also apply to the financial sector. Bangladesh capital market is sick and crippled. Similarly, the insurance sector is also in an unacceptable state. For good governance in the financial sector, individual or institutional sectors should be closed.