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Bangladesh - April 20, 2024

Risk of looting mortgage assets

Mahfuja Mukul: There is fear of looting again in the name of selling the assets of the debtors of banks which may disappear as a result of bank merger. At this stage, a circle can grab it in the name of selling the assets of the defaulters at water rates. It is also known that plans are being made to seize valuable resources by using loopholes in the law.
Earlier also there are precedents of selling assets of debtors through auctions at water prices. In this case, there is an agreement in advance between the concerned bank and the tenderer. Under the guise of this agreement, the mortgaged assets are transferred at the rate of water.
Meanwhile, the central bank is preparing policies for the formation of asset management companies to collect money by selling assets of debtors quickly. A draft has already been prepared. It is also known to have many loopholes.
According to sources, the process of integration of weak banks or finance companies with strongbank is ongoing. In this regard, on April 4, the central bank issued a policy for the merger of commercial banks and finance companies.
Under this policy, weak banks or finance companies can merge with strong banks. By December, banks and finance companies can decide to merge themselves. After December, the central bank can direct the merger of weak banks or finance companies with any strong bank.
Incidentally, the private sector Padma Bank, weakened by looting, will be merged with the private sector Exim Bank. Government Bangladesh Development Bank burdened with defaulted loans will be merged with government Sonali Bank.
The public sector Basic Bank weakened by looting will be merged with the private City Bank. It was supposed to merge with Agrani Bank. But later that decision was changed. The private National Bank weakened by looting will be merged with the private UCB. Besides, discussions are going on to merge some other banks.
According to sources, as a result of the merger, the weaker bank or finance company will disappear with the stronger bank. In this process, there will be some negative impact on the financial indicators of strongbank.
To deal with this situation, firstly, to strengthen the financial base, strong bank will take the initiative to collect cash by selling the mortgaged assets of the defaulted banks or finance companies.
Against the loan, many defaulters have mortgaged various assets including land, houses, land of closed factories.
They are now being sold at the price of water and there is a fear of looting. Already defunct banks or finance companies are weakened by looting. Even though it has disappeared now, there is still the fear of looting.
In the past too, there have been examples of selling the assets of the debtors of various banks at the price of water.
A government bank, a few private banks sold the assets of the defaulters at water prices and handed them over to a clique through secret agreements. Against this, bank loans have been adjusted. But asset prices were even higher. In this context, the managing director of a bank said that a mortgage asset could not be sold at a fair price even after several rounds of tenders. Because no one submits a tender out of fear of the owner.
According to sources, the central bank has now drafted a policy to form asset management companies to collect money from banks by selling mortgages or other assets of defaulters. Through this company, the bank will be able to collect the money by selling the mortgage assets quickly. Asset management committee should be formed under that policy.
Now the question arises as to who will form the asset management company. If bank robbers are in asset management companies, the risk of robbery will increase.

Meanwhile, the potential policy is being drafted in a way that leaves no room for bank robbers to be excluded. In this context, bank robbers can once again share in the mortgaged assets.
In this context, President of Bangladesh Economics Association and former professor of Economics Department of Chittagong University. Moinul Islam said, the policy should be made in such a way that no bank robber, defaulter, bank or government money embezzlement person can participate in the asset management company. Mortgaged assets are being sold through auctions between bank auctioneers. The bank is failing. Profit is a cycle. This cycle is identified. Care should be taken to ensure that they do not remain in asset management companies.
He also said that once the bank was robbed, it became weak. Now, in the case of selling assets, it should be observed that there is no looting.
Besides, the bank can sell the mortgaged assets of the defaulter without a case under the existing Finance Court Act. If the money is not recovered from the bank, the defaulter can sell other assets and file a case to recover the money. In this process, it is feared that there is a plan to loot the mortgaged assets or other assets by selling them at low prices.
According to sources, a cycle has already started to form the asset management company. It does not include persons from any reputed audit or asset valuation company. They are all bank robbers indirectly. They are preparing in the light of the possible policies of the central bank. So that the policy can form this company quickly. As a result, assets can be quickly sold to preferred circles. Both will benefit in this process. Because the tender for the sale of mortgaged assets is presented in such a way that no one but the members of the circle can participate. This is how most of the bank’s mortgage assets are being sold. Assets of defunct banks and finance companies are also being sold. If assets are thus lost, the bank will be weakened instead of strengthened even after the merger.
According to central bank sources, the central bank will keep an eye on ensuring transparency in the sale of assets. If there is any irregularity, action will be taken against him.
It is known that there are currently 61 banks and 34 finance companies in the country. The number of banks and finance companies will be reduced through mergers.

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