Food ministry seeks action against banks

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The food ministry has sought the help of the finance division in taking action against a number of banks, both in public and private sectors, for the failure to en-cash the bank guarantees furnished by the errant local suppliers of rice to the directorate of food.

Because of non-cooperation on the part of banks concerned the government has been deprived of Tk 196.7 million (19.67 crore), official sources concerned alleged.

The food ministry now faces an uphill task of meeting the procurement target of 1.2 million (12 lakh) tonnes of Boro rice and 0.03 million (3 lakh) tonnes of paddy.

Sources said the banks concerned were requested by the food directorate to forfeit the earnest money of the suppliers, who had failed to enter into agreements with it (directorate) after receiving the 'notification of award', and issue pay orders in favour of the government. One of the clauses of the bank guarantees provides for immediate encashment of the same as soon demands are made by the food directorate.

Sources alleged that the failure of the banks concerned to en-cash the bank guarantees in time had created opportunities for the errant suppliers to take recourse to legal actions.

The food ministry has already identified the private and the state-owned commercial banks (SCBs) which have failed to act in accordance with the provisions of the guarantee letters. The private banks have defaulted more than the public sector banks on taking necessary actions, sources said.

The food ministry had earlier cancelled licences of more than 2000 rice millers for their failure to keep their commitment on the supply of Boro rice to the government this year.