BASIC Bank lost many trusted clients for graft
Many trusted clients severed business ties with scam-hit BASIC Bank due to widespread corruption during the tenure of the previous management.
“A total of 18 good borrowers have left the bank out of frustration,” according to a report prepared by the new board of the bank.
BASIC sent the report to the Banking Division and Bangladesh Bank last month with a list of such borrowers. It said the bank is now trying to bring back these clients.
The amount of loans with these borrowers was around Tk 613 crore, which they either repaid or transferred to other banks.
A board member said top brasses of the previous management used to demand bribe when clients sought working capital or went to the bank for opening letters of credit.
Massive irregularities began when the immediate past chairman, Sheikh Abdul Hye Bacchu, was appointed in 2009. The government reconstituted the board in July this year and made Alauddin A Majid its new chairman.
Before 2009, BASIC was an efficient state bank and Majid was the managing director of the bank for a period then.
BASIC has already contacted seven good clients who have expressed their interest to return to the bank, according to the report. They are Sanzi Textile Mills, Standard Finis Oil, Partex Jute Mills, Union Oxygen, M Hossain Spinning Mills, Delta Medical College & Hospital, and Rising Spinning Mills.
Other trusted clients who left the bank are Anwar Cement, Metrocem Ispat, NIP Chemicals & Pharmaceuticals, SQ Hues, Modern Erection & Modern Electrical Works, Butterfly Marketing Company, Salam Jute Mills, Astech, PHP Cold Rolling Mills, National Art Press, and Usha Construction.
In the last two months, the new board identified the major problems the bank was facing and prepared a work plan, which was sent to the government.
In the report, the board said it has started cleansing the personnel, particularly who abetted and perpetrated corruption in extension of loans and recruitment of staff.
Till June 30, capital shortfall of the bank was Tk 1,676 crore and the board requested the government to provide the amount immediately.
The report said large loans accounted for 68 percent of its total loans against the regulatory limit of 40 percent, and out of its 68 branches, 34 were loss-making. Of its 2,249 employees, the number of incompetent and excess manpower was around 700, it said.
On July 31, non-performing loans in 543 accounts amounted to Tk 4,560 crore out of its total loans of Tk 11,237 crore.
The board in its report also provided the government with a description of the steps taken and to be taken to improve the condition of the bank.
As part of the steps, the contractual service of the secretary to the board was terminated and 14 employees with fake certificates or documents were dismissed, the report said.
After a board meeting yesterday, the management was asked to take action against seven officials who are now facing cases lodged by Anti-Corruption Commission.
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