BASIC Bank’s classified loans figures would be much higher than the amount referred in the working paper presented at the watchdog meeting
The amount of non-performing loans of the scandal-hit state-owned BASIC Bank now stands at over Tk4,157 crore, or 36.55% of the bank’s capital, the finance ministry informed a parliamentary watchdog tasked to ensure transparency in all public entities.
According to the paper presented by the banking division of the finance ministry at a meeting of the Public Undertaking Committee yesterday, the amount was Tk4,016 crore more than the sum (Tk141.23 crore) in 2009 when the previous management was headed by outgoing chairman Sheikh Abdul Hye Bachchu.
Non-performing loans are called classified loan in terms of banking where banks have no income from such loans.
Loans are the assets of the banks as it earns interest from the parties against the loans. Therefore, non-performing loans are liabilities for banks.
The observers in the banking industry said BASIC Bank’s classified loans figures would be much higher than the amount referred in the working paper presented at the watchdog meeting held at the parliament building.
The BASIC Bank gave loans amounting to over Tk456 crore and over Tk498 crore in 2009 and 2010 respectively. The amount shot up to over Tk881 crore the next year and grew to Tk1,965 crore in 2012.
In 2013, the bank made loans amounting to over Tk 2,305 crore, according to the paper obtained by the Dhaka Tribune.
Finance minister Abul Maal Abdul Muhith told parliament that: “What is going on at BASIC Bank is robbery.”
The bank’s Gulshan, Dilkusha and Shantinagar branches have disbursed more loans violating loan guidelines. In some cases, false papers were used to issue the loans.
“Our observation is that the whole management board has colluded to grant loans in violation of terms and conditions. We see there are massive irregularities,” Col (Rtd) Shawkat Ali, the chairman of the 10-member committee, told the Dhaka Tribune after the meeting.
He said the watchdog members were happy with the government move that followed after the media exposed the corruption at BASIC Bank.
“But, we have asked the ministry to take tough legal action against the persons responsible and to recover the money,” said Shawkat, who is also a former deputy speaker.
The government replaced the chairman and the management board with a new one. The working paper says bank officials starting from branch level to highest management had colluded to disburse loans and caused damage to the establishment.
“Thus, the bank’s goodwill is at the lowest ebb,” it says.
M Aslam Alam, secretary to the banking and finance division, told the meeting that the government would further investigate irregularities and refer the matter to the anti-corruption commission, which had already started investigating the scandal.
“I think the figures of BASIC Bank’s classified loans (36.55%) are not right. Actually, this is higher than the figure (presented at the parliamentary committee),” Mamunur Rashid, a former banker, told the Dhaka Tribune.
Source: Dhaka Tribune
