Given the ruinous state a successful specialized state-run bank -- the BASIC Bank -- has been brought into, submission of resignation by its chairman Sheikh Abdul Hye Bacchu appears somewhat diversionary having regard to an outcry among knowledgeable circles for his dismissal and prosecution. There is no way one can trifle with the irregularities that sent the bank on a tailspin with a loss upwards of Tk.4,500 crore, as estimated by Bangladesh Bank
This scandal has the familiar ring of the other scams that preceded it, which only means that the government has failed to learn any lesson from the past blunders in the financial sector. The serious pitfall has been in the appointment of chairmen and members of the boards. The selection was tainted by opaque choices, based more on political loyalty than on professional integrity and competence.
BASIC Bank is a glaring case in point. It was one of the best-run banks until 2009.With Sheikh Abdul Hye assuming office in that year, the bank in less than five years got itself mired in financial irregularities. The types of malpractice under his allegedly single-handed control included grant of loans overriding recommendations of the credit committee, inflating mortgage prices as collateral, and even issuing loans to clients before opening an account.
What appears particularly indefensible was granting him second term on the back of his irregularities-ridden first term.
The finance minister appears seized with the issue. He has said: “Resignation does not give a solution-the prosecution will go on.” Indeed, this discredited chairman must be held to account and made to face the full force of the law.