Finance Minister\\\'s lament and big loan scammers

Sayed Kamaluddin | Published: July 07, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

Widespread corruption, administrative reforms or the lack of it, moral turpitude and the like occupied newspaper headlines in the past few days. A visibly exasperatedÂ Finance Minister AMA Muhith's admission in parliament the other day that bank loan scammers got scot-free 'due to backing' did not only hog the headlines but also became a widely discussed topic everywhere. We are quite familiar with the term 'bank defaulters' as many a business tycoon perpetually defaulted after managing substantial amounts of bank loan by influence peddling while still retaining their enviably attractive positions in society. All legal notices from the banks, government persuasion and wide media coverage have failed to prompt them to properly service their loans.
Though bank defaulting is a type of scam, the scammers that the finance minister referred to are a new breed and the magnitude and dimension of their misdeed were, to put it simply, shocking. The minister named only two of the state-owned banks - Sonali Bank and Basic Bank - to substantiate his statement.
As the story goes, the Bangladesh Bank, the country's central bank, had unearthed a loan scam of over Tk 36 billion (3,600 crore) in Sonali Bank's Ruposhi Bangla Hotel Branch in May 2012. Of this amount, the Hallmark Group, a little known business group, had taken Tk 26.86 billion (2,686 crore), using forged documents. This could not have been possible without active connivance of the top bank officials.
To make the story short, based on the central bank's complaint, the Anti-Corruption Commission (ACC) filed cases against 27 top officials of the bank including former M.D. Humayun Kabir, two DMDs Mainul Haque and Atiqur Rahman, general managers Nanigopal Nath and Mir Mahidur Rahman. Of them DMD Atiqur Rahman died in jail while Mainul Haque and Mir Mahidur Rahman are still in jail. However, the bank's M.D. Humayun Kabir and GM Nanigopal Nath are absconding.
The Basic Bank had provided even a bigger amount of loan, Tk 40 billion (4,000 crore) to questionable business groups without proper documentation. It is alleged that the rot had set in this specialised bank after the appointment of Sheikh Abdul Hye Baccchu as its chairman in 2009 and the loan anomalies were discovered in 2012 after the central bank launched an investigation. The Basic Bank's chairman resigned only in July 2014 following allegations of financial mismanagement.
The central bank has sent its investigation report on the banking scam to the Anti-Corruption Commission (ACC) quite some time ago, but no action has yet been taken by the anti-graft body. Â
POWERFUL PEOPLE BEHIND THIS SCANDAL: The central bank's former Deputy Governor Khandaker Ibrahim Khaled in a press interview last week said that the finance minister's admission of his predicament about not being able to discipline the loan defaulters and their cohort amongst the top bank officials clearly indicate how politically powerful the scamsters are.
The finance minister said in parliament that trust and confidence are considered two pillars of the banking industry. He said actions were taken against a number of senior officials of Sonali Bank for their involvement in the scam, but he lamented "A top official of the Sonali Bank cannot be sent to jail because of backing of our own people. I am very annoyed about this".
Referring to the situation that prevailed while he was with the central bank, Ibrahim Khaled said that a group of powerful people tried to forcibly enjoy special facilities from various state-owned commercial banks. But because of strong measures taken by the then Bangladesh Bank Governor Dr Farashuddin Ahmed and Finance Minister Shah AMS Kibria, nobody actually dared to take any such privilege.Â Â
However, when the finance minister said in parliament that 'nobody had the courage to punish a certain bank like the way Sonali Bank was punished', he was perhaps hinting at the Basic Bank and the ACC's delay in taking any action against those persons who were listed in the central bank's investigation report.
The media exposure of loan scams has obviously necessitated intervention from the highest authority in the government to end this culture of impunity that has been going on for a long time.
sayed.kamaluddin@gmail.com