Sheikh Abdul Hye Bacchu, the man who has been in the national limelight of late for his alleged Machiavellian style of running the Basic Bank, a state-owned entity, is finally ousted from chairmanship of the bank.
Finance Minister AMA Muhith broke the news to reporters last Saturday about Mr. Bacchu's submission of resignation from the post of chairman of the board of directors of the Basic Bank.
It does not need any elaboration that the source from whom Mr. Bacchu used to draw all his strength and ran the bank the way he liked has asked him to step down, finally.
It will not be out of place to suspect that Mr. Bacchu is some way connected to the very powerful quarters. His appointment as chairman of the Basic Bank for the second term in 2012 despite the central bank's revelation of massive financial irregularities during his first term was rather surprising.
However, his mentor/s, it seems, could not anymore bear with the widespread criticism over massive irregularities with the Basic Bank funds and asked Mr. Bacchu to step down.
The finance minister while breaking the news about the resignation told newsmen that the issue involving the Basic Bank loan scam did not end in the resignation. "The Anti-corruption Commission (ACC) has already started investigation into the issue (Basic Bank Irregularities). The prosecution will go on", he said.
The finance minister appears to be firm in dealing with the Basic Bank case. But there are justified reasons for one to be sceptical about any meaningful move to take Mr. Bacchu to task, if he is found guilty of wrongdoing.
The popular perception is that it is the powerful people who are involved in all sorts of scams, financial or otherwise, and nothing would happen to them because of their connections to high places. However, there are lots of instances to substantiate such a notion.
The resignation of Mr. Bacchu itself is an instance. Despite widespread allegations of irregularities brought against him, the finance ministry did not take any move against the immediate past chairman of the Basic Bank. Mr. Bacchu was given an honourable exit route through his resignation.
The share market scams of 1996 and 2010 and the Sonali Bank's Hall-Mark issue are also among many other instances where people with political connections could get away with their crimes. Besides, there could be many more incidents of financial crimes involving powerful individuals that have remained unexposed. On detection, the authorities concerned, including regulatory bodies, at times, deliberately hush up many financial crimes in banks and financial institutions.
Fraudulence and default on repayment involving bank loans are considered to be very common developments. But technology and modern banking practices have helped the banks to bring down the number of such incidents to a minimum. But when the top most echelon of the banks having political blessings gets involved in loan irregularities, it becomes hard for the honest career bankers to check the rot.
This has happened in the case of Sonali Bank and also with the Basic Bank. The former is the largest among all banks, in terms of its operations and reach. The second one, a specialised and a profit-earning one until 2009, was a role model for other state-owned banks.
But the bank entered a 'phase of decay' since Mr. Bacchu took over as the chairman of the bank in 2009. Things got worse during his second term starting from 2012.
Usually, the chairmen of private banks take interest in the operations of the bank and call the shot in most affairs of the banks. But the situation is supposed to be altogether different in the state-owned banks. In the state-owned banks, the board of directors, traditionally, used to leave the most part of the operations of the banks to the career bankers. The boards avoided any sort of interference in management and loan decisions and took decisions on policy matters.
But the situation has changed in the public sector banks of late following appointment of incompetent political elements to their boards. Even it is ensured that experts and specialists who are appointed as directors are loyal to the ruling party.
The finance minister himself has admitted the ill effect of 'political' appointments. He said, "In such cases, the government is forced to admit liability-- the government has to pay the price for a mistake in the selection price".
In fact, the government and its leaders, to be precise, do not have to pay a penny from their own pockets for the 'mistake' they commit in the appointment of their 'own men' to the boards of the public sector banks. It is the taxpayers who pay a substantial amount almost every year in the name of re-capitalisation of the state-owned banks where capital inadequacy and high incidence of loan defaults are the order of the day.
Mr. Bacchu has left Basic Bank. He has left behind something that his successor or the newly re-constituted board would not cherish. The new board might have to approach the finance ministry for re-capitalisation fund for the bank. And the ministry would have little option but to entertain the request. The issue of getting back the money, more than Tk 45 billion, siphoned off the bank is likely to be a secondary one. The case instituted by the ACC would go on years after years. The money that has been taken out of the Basic Bank's vault using political clout and fraudulent means would never come back.
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