Banking sector: Beware of scamsters

Shaiful Hossain | Published: July 18, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

'Robbery' and 'misappropriation' are two different words having quite a similarity in meaning. But sometimes we get confused as the dividing line between the two often gets blurred. The embezzlement of funds that happened in the banking sector over the past few years cannot simply be termed as misappropriation. In the recent past was exposed embezzlement or theft of the fund of BASIC Bank, once a well-run state-owned commercial bank (SoCB). The media reported that the funds had been misappropriated in collusion with the board concerned and some so-called banking professionals. They have not only destroyed BASIC Bank but also tarnished the reputation of the whole banking community in the country.
Former Deputy Governor of Bangladesh Bank Khondker Ibrahim Khaled said very rightly that it was rather a robbery than banking. Robbery is taking the property of another, with the intent to permanently deprive the person of that property, by means of force or fear. On the other hand, misappropriation of funds means the intentional and illegal use of a fund of another person for one's own purpose or for any other unauthorised purpose. It can be done by a public official, a trustee of a trust, an executor or administrator of a dead person's estate or by any person entrusted with the responsibility to care for and protect another's assets. Both robbery and misappropriation of funds are punishable offences.
In January took place a robbery at a branch of the Sonali Bank Limited, the largest SoCB in the country. The robbers had made off with Tk 164 million from the bank's vault in Kishoreganj after tunnelling their way into it from an abandoned room of a neighbouring house. RAB sources said that one Sohel was the mastermind of the heist while Idris, who was with him for a while, was an accomplice.
The officials at the bank branch in Kishoreganj's Rathkhola area said that they had noticed a 15-foot long tunnel. "We used to dig at the weekends, keep the earth in our house and slowly removed it in buckets. The progress in tunnelling was painstakingly slow and took us two years, but the greed kept us going," Sohel told journalists. This reminds us of Paul Brickhill's World War II classic Tunnel to Freedom.
The main focus of this scribe is not on elaborating the consequences of the robbery at the Sonali Bank branch or any other bank but there is a correlation between this sort of robbery and the well-planned embezzlement or misappropriation of banks' funds by so-called loan seekers or customers or businesspeople in collusion with the so-called banking professionals and honourable board members. We know about the misappropriation of bank money, mainly depositors' money, by Hallmark and Bismillah Groups and there are also other such scams. Thousands are being swindled from the state-owned commercial banks (SoCBs) and private commercial banks (PCBs) with little or no chance of recovery as the loans have been sanctioned against no collateral or fake and negligible collateral.
The Sonali Bank's looted money has been recovered. But what is the fate of the funds of hundreds of stakeholders of the Hallmark or Bismillah Group? Mr Sohel and Mr. Idris have been in jail. But what's about the hundreds of other Sohels and Idrises (sorry, only the owners are facing legal action but not other stakeholders)? The wilful defaulters are the well-connected people of society. Now is the time to be careful about these people and their collaborators to avert flight of capital. The most part of this embezzled fund would turn into black money adding to the underground economy and their last destination would be banks in foreign countries. (According to the latest data of the Swiss National Bank, Bangladeshis deposited Tk 32.36 billion with different Swiss banks until 2013, a rise by 62 per cent over the previous year.)
Sohel and Idris got nabbed by the law-enforcement agencies. But what's about those who have robbed billions in the name of so-called loans? The government and the civil society should look into this issue. Have we seen any exemplary punishment to any of the fake loan takers or wilful defaulters or these robbers of bank money?
By definition, a bank is an establishment authorised by a government to accept deposits, pay interest, clear cheques, sanction loans as an intermediary in financial transactions and provide other financial services to its customers. It takes deposits from people of all walks of life in society and lends the same to the people having credit needs. So a bank is an organisation dealing with trust. But what will be the state of trust of the depositors, if these types of dishonest activities continue to take place in banks?
The banking sector needs to get rid of the scamsters. Otherwise, the whole sector will suffer, financially as well as reputation-wise.
The writer is banker and columnist.
 shaiful_hossain@yahoo.com