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Thousands of crore of taka were looted from these banks in the name of loans over the last several years
Three state-run banks and one private commercial bank that have earned bad names for large scale loan scams hold about 37% share of the country’s total non-performing loans (NPLs).
At the end of June this year, the amount of NPLs in the banking sector stood at Tk96,116.65 crore. Of the total, state-run Sonali, Janata, BASIC bank and private commercial Padma Bank’s NPLs amounted to Tk35,478.35 crore, or 37% of the entire stressed loans in the banking sector, according to the latest data of the Bangladesh Bank(BB).
Thousands of crore of taka were looted from these banks in the name of loans over the last several years, says a high official of the BB, seeking anonymity.
He said the lion’s share of the looted money was yet to be recovered. Consequently, non-performing loans of those banks have been increasing year on year, as the lenders are yet to get back their previous business image and restore financial health due to loan scams, he added.
BASIC Bank loan scam
The state-owned BASIC Bank was one of the top rated banks till 2009. But between 2009 and 2013, around Tk4,500 crore was swindled out of BASIC, making it one of the biggest loan scams in the country.
Sheikh Abdul Hye Bacchu was the chairman of the bank during the scam period.
The Bacchu-led board was fully responsible for the scam, said an official of the Bangladesh Bank, seeking anonymity. He said of the swindled money that more than 95% had been sanctioned by the board.
After the big financial scam, the bank’s financial strength became weak year on year and the state-run bank is yet to get back its previous business image and have its financial health restored.
At the end of June this year, the bank’s NPLs stood at Tk7,676.29 crore or 51.55% of its total loans.
Talking to Dhaka Tribune, BASIC bank immediate past Chairman Alauddin A. Majid said the management had failed to make a turnaround of the bank that could gradually have got better now with the help of all stakeholders.
“We recovered around Tk1,500 crore from the defaulters during my period,” he said.
Sonali Bank loan scam
Sonali Bank’s loan scam centering on the Hallmark Group was once a much–talked about topic in the banking sector. The bank’s Ruposhi Bangla Hotel branch sanctioned Hallmark and its five associate companies Tk3,547 crore on fake documents between 2010 and 2012.
Of the Tk3,547 crore, the Hallmark Group alone took away Tk2,686.1 crore, as per a BB inspection report.
The state–run bank has yet to recover any amount from the scammers, according to a high official of the bank.
As of June this year, Sonali Bank’s NPLs stood at Tk10,086.41 crore or 21.16% of its total outstanding loans.
Janata Bank loan scam
Now Janata Bank has the highest defaulted loans in the country’s banking sector, with its NPLs standing at Tk14,005.79 crore till June this year, which was 26.76% of the total outstanding loans of the bank. However, the amount was Tk5,818 crore at the end of 2017.
The sharp increase in bad loans has largely been attributed to the failure by the bank’s clients, Crescent Group and AnonTex, to clear their loan repayments.
The bank lent above Tk10,000 crore to Anon Tex and Crescent Group by violating the BB’s single borrower exposure limit criteria, according to the BB’s inspection report.
Farmers Bank (now Padma bank) loan scam
The Bangladesh Bank’s investigations found massive irregularities in the Farmers Bank’s loan disbursement three years after the bank came into being in 2013.
Some unscrupulous borrowers plundered more than Tk3,500 crore from the bank with the help of the board of directors, as per BB report.
The bank chairman, Muhiuddin Khan Alamgir, and audit committee chairman Md Mahbubul Haque Chisty were forced to resign in November 2017.
Following the scandal, the bank was renamed Padma Bank in February 2019 as a move to recover its tarnished image.
As of June, this year, the bank’s NPLs stood at Tk3709.41 crore or 66.33% of its total disbursed loans.
Talking to Dhaka Tribune, the bank’s managing director Md Ehsan Khasru said the management of the bank was trying to recover the money. It had filed about 400 cases with the Artha Rin Adalat.
(DT)
