The BB circular that meant more for the gallery

FE Team | Published: September 26, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Shamsul Huq Zahid
That the interim government in the backdrop of a sort of stagflation in the economy was making amendments to its original ways of dealing with the businesses became evident when it convened a high-profile Dialogue on September 09 last at a city hotel.
The government top brass felt that it was high time to dispel the panic created among the businesspeople by actions against corrupt elements, tax evaders etc., and unusual inquisitiveness of banks and other relevant agencies.
Accordingly, the business leaders were given a loud and clear message at the Dialogue that the government, under the ongoing drive against graft and tax evasion, was not anymore interested in chasing the bad elements in the business community and everyone was free to do their normal business activities in a fair and transparent manner.
The businesses were given the idea how far the government would go in its bid to punish the corrupt elements and assured that none would be pursued if they did not indulge in fresh irregularities.
The businesses wanted early follow-up actions from the government to demonstrate its sincerity to bring back normalcy in economic activities. It did not take much time for the relevant agencies to announce a few actions directed towards that goal.
The central bank has asked the commercial banks to stop asking unnecessary questions to the clients wanting to opening letters of credit and continue transactions with business houses whose owners are either in jail or have gone into hiding to evade arrest. It has advised the banks to consider the criminal cases objectively with regard to loan classification, new loan sanctions and opening of letters of credit (LCs).
While supporting action against persons standing accused of corruption, tax evasion and other offences, the banking sector regulator, in a circular issued last Monday, pleaded for uninterrupted operations of industrial and business operations owned by them for the sake of the country's economy, employment of thousands of people and revenue mobilisation by the government.
However, the central bank circular appears to be vague on many counts. For banks, the issues of unemployment, national economy and government revenue are of secondary importance in the context of their relationship with clients. What is more important to banks is the track record of their clients in servicing their debts. If a firm belonging to a fugitive businessman facing criminal charges fails to service its debts, the bank concerned has no other option but to take actions in accordance with the rules and regulations enforced by none other than the central bank.
The central bank in the circular in question advised banks to treat individuals and business organisations separately in terms of business activities. But when individuals are at the helm of business organisations, how can the banks ignore them? The latest Bangladesh Bank circular, it seems, is meant more for the gallery than any substantive action.
The National Board of Revenue (NBR) which, of late, has irked the businesses more than any other government agency in its bid to catch large tax evaders, has also softened its stance. It has decided to relax its current pace of investigations into bank accounts of suspected tax evaders.
There could be few other moves to keep the business community happy since its cooperation is now being considered extremely important by the present administration.
The top brass of the government has promised that there would be no lists of corruption suspects after the current month. A new list will be published soon but the names of many businessmen are unlikely to be mentioned there.
The government, according to an item published in a Bangla daily Tuesday, might even become lenient with the businessmen now in prisons. They could be handed down token punishment and set free if they admitted their guilt and transfer the ill-gotten wealth to the public exchequer. Even the release of the wives, sons and daughters of the detained businessmen on bail, reportedly, is now under consideration.
The events that have already taken place and are likely to take place soon to restore 'confidence' among the businesses have again proved that economy is far more important than politics. And all the top politicians across the divide who are either in jail or on the run must be jealous of the businessmen who are receiving preferential treatment these days from the administration. Of course, there are a few two-in-ones who are both politicians and businessmen. It is up to the present interim administration to decide which part of their dual identities would get precedence. Once out of jail, most politicians might seek to divorce politics and become businessmen.