FID to train directors to save scam-hit public banks; Experts call it farce, waste of time

The Financial Institutions Division begins a programme in Dhaka today to train directors to safeguard interests of state-owned banks amidst expert scepticism about any positive outcome.
The inaugural session of the five-day event at Bangladesh Institute of Capital Market auditorium would be addressed by finance minister AMA Muhith at 10:00am.

Comptroller and auditor general Muslim Chowdhury, Bangladesh Bank governor Fazle Kabir, its former deputy governor SK Sur, deputy governor Moniruzzaman, Insurance Development and Regulatory Authority member Dokul Chand Das and Sonali, Rupali and Krishi bank managing directors would teach the directors how to protect the interests of the public banks.
The division arranged the programme in the backdrop of loan scams involving at least Tk 13,000 crore in state-owned Sonali, BASIC and Janata banks under the board of directors appointed by the back-to-back governments led by the Awami League.

The Anti-corruption Commission failed to prosecute former BASIC Bank chairman Abdul Hye Bachhu although the central bank found his involvement in approval of loans of Tk 6,000 crore to fictitious borrowers that caused the once profit-making bank to face almost bankruptcy.

Financial Institutions Division secretary Asadul Islam told New Age on Thursday that the division was arranging the programme to remind the board of directors about their responsibility.
Former central bank governor Salehuddin Ahmed noted that there would be no benefit of such brainstorming session since problems of the state-owned banks were well-known to all.
Lectures would make no change in the country’s banking sector now facing multifarious problems like growing non-performing loans, political intervention and hostile takeover, he said.
He said that the government should show willingness to punish the politically motivated directors responsible for shabby condition of the state-owned banks.

Classified loan in six state-owned commercial banks — Sonali, Agrani, Janata, Rupali, BASIC and Bangladesh Development banks — increased to Tk 42,852 crore on June 30, 2018 from Tk 37,326 crore on December 31, 2017, according to the central bank.

On August 2, AnonTex Group led by its chairman Md Younus (Badal) met finance minister AMA Muhith and lobbied for fresh loans although the group had already defaulted on loan of over Tk 5,500 crore extended by Janata Bank.

Bangladesh Institute of Bank Management director general Taufiq Ahmed Chowdhury said that the training programme was ‘contradictory’ since the government appointed them based on central bank reports.

Still training can be provided to directors to impart knowledge on new subjects like cyber theft and money laundering law, he said, adding that no training was needed to aware them about their core responsibility. It is farcical and waste of time, he said.

Taufiq said that the division could provide code of conduct and other necessary directives in black and white with the appointment of directors to the public banks.
As per financial institutions division data, Tk 9,788 crore was sanctioned for the scam-hit state-owned banks, including Sonali, BASIC and Janata, between 2012-2013 and 2016-17.
Sonali Bank was given Tk 3,005 crore in three phases to overcome its severe capital shortfall although it failed to recover a single penny of Tk 3,500 crore gulped by Hallmark Group in 2013.
BASIC Bank was given the highest Tk 3,390 crore in three financial years to meet its capital shortfall.

Janata Bank, facing a loan scam of over Tk 5,000 crore extended to AnonTex Group, received the bailout fund of Tk 814 crore.
Transparency International Bangladesh executive director Iftekharuzzaman said that there was no denial that the state-owned banks faced crisis because loan scams one after another.
People tied to the management and board of directors of the banks, mostly appointed in line with the incumbents’ partisan interests, are behind the loans scams, he alleged.