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Thursday, January 3, 2019 11:26:01 PM
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Time to reorganize the banking sector

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LOAN irregularities in Janata Bank finally bring down the State-owned Bank to log in losses of Tk 3,132 crore in the first nine months of 2018. Bangladesh Bank unearthed two big loan scams of AnonTex and Crescent involving a total of Tk 8,300 crore that turned defaulted in June, sinking the bank into losses to the tune of Tk 1,589 crore for the first time in five years. The losses continued to pile up, leading to a capital shortfall of Tk 3,923 crore in September. In contrast, at the end of December, the bank was in capital surplus of Tk 26 crore.
According to data from the central bank, between January and September, Janata's default loan ratio soared to 31.31 per cent, in contrast to 18.22 per cent at the end of last year. As of September, Janata's total outstanding loans stood at Tk 14,376 crore, the highest among the state banks. The bank lent to 31 business groups violating the single borrower exposure limit. Of the 31 groups, 11 turned defaulters. Janata is the only state-owned commercial bank out of four to have registered losses this year. Sonali made the highest profit of Tk 873 crore, followed by Agrani at Tk 36 crore and Rupali at Tk 16 crore.
The scenario is the same for most of the state-owned and commercial banks. Though top bankers claimed that the anomalies that surfaced in the banking sector were nothing big and serious in comparison to the industry's loan volume of more than Tk 8 lakh crore, the banks indulge in the loss in contrast to the healthy growth of the sector as well as the economy. In the last decade, the overall non-performing loan has increased by four times to nearly Tk 100,000 crore. We are surprised why the bankers are not ready to accept the anomaly as a big issue.
The new government will hopefully take the irregularities in the banking sector with an iron hand and establish corporate governance with accountability and transparency. The promise of 'zero tolerance against corruption' made by the winning party should be maintained in every tier of the banking sector.

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