Tk 426b of bank money stuck in court cases

Syful Islam
Funds worth Tk 426 billion of different banks has remained stuck in 40,214 money suits lying with the Artha Rin Adalats (Money Loan Courts), officials have said.
The substantial sum with no return has put the banks in dire straits, triggering liquidity crisis.
The central bank recently sent the figures to the finance ministry following a query by the parliamentary standing committee on public accounts on status of cases, their settlement, and recovery of classified loans since the inception of the Artha Rin Adalats.
According to Bangladesh Bank (BB) statistics, until December last year, four state-owned commercial banks-Sonali, Janata, Agrani and Rupali-had Tk 206 billion stuck in 16,066 cases in courts.
Besides, four specialised banks-Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Bangladesh Development Bank Ltd, and BASIC Bank-have 18.79 billion trapped in 6,680 suits awaiting disposal for long.
Some 31 private commercial banks (PCBs) have Tk 197.46 billion stuck in 15,815 cases with the Money Loan Courts. Until December last, the newly-established nine PCBs did not file any case with the courts, the BB statistics show.
Ten foreign commercial banks or their branches have Tk 4.38 billion stuck in 1,653 cases filed with the Artha Rin Adalats.
Since inception, some 134,627 cases were filed with the Artha Rin Adalats and until now 94,413 were settled with recovery of Tk 107.68 billion.    
When contacted, chairman of the Association of Banker's, Bangladesh (ABB) Ali Reza Iftekhar told the FE that borrowers always tried not to pay back money showing various causes. This has compelled the bank authorities to go for cases to recover money.
The default-culture has gone deep manifold during the last three years putting the banks in dire straits, he said.
"A huge sum of money has remained stuck with borrowers from which we are not getting any profit for many years. But we are paying interest to the depositors. It is causing loss to the banks," Mr Iftekhar said.
He said since a large amount has remained stuck, the banks are suffering from liquidity shortage and facing difficulties in doing business. "We need to keep provisions with the central bank against the stuck-up loans which are another burden for us."
Asked about the reason behind such a large number of money suits, Mr Iftekhar said sometimes loans are given to wrong people since every judgement of bankers can't be 100 per cent accurate.
He suggested the bankers to be more careful before granting loans.
The ABB chairman, replying to a query, said the rate of settlement of cases with the Artha Rin Adalats within Dhaka is fine but needs to be expedited in courts outside the capital.
"The process of settlement of money suits is very complicated and lengthy," he said adding the slow rate of settlement of cases and filing of new ones have led to piling up of a large number of money suits in the courts.
A general manager of the Bangladesh Bank, preferring anonymity, termed the increased number of money suits as outcome of 'bad culture' of the country.
"The tendency of not returning borrowed money is very much injurious to the economy," he said.
"The borrowers should know that the banks do not run with their own money. They give loans by taking deposits from people. The banks have to pay interest as well the capital back," the central baker noted.
He suggested that disposal of the cases needed to be quickened to recover the money. "Bankers also have to be more careful before granting loans," he added.
    syful-islam@outlook.com