News Analysis: Muhith now scapegoat
On Monday, some ruling Awami League lawmakers raised a hue and cry in parliament.
They blamed the finance minister for failing to act against those allegedly involved in banking sector scams, and blasted him for allocating Tk 2,000 crore in the proposed budget for recapitalisation of a number of state-run banks suffering from capital deficit following the scams.
The next day, some MPs from opposition Jatiya Party intensified the attack on AMA Muhith and demanded his resignation. They also demanded that Muhith be sued for “criminal offence” for offering recapitalisation to the graft-riddled banks -- BASIC, Sonali and Rupali.
But they might all have forgotten the reality on the ground. They might also have overlooked what Muhith said two years ago.
On June 29, 2015, the finance minister told parliament that action could not be taken against the scamsters because they “belonged in his own house”.
But is Muhith alone responsible for this non-action against these fraudsters? And was it his personal choice to provide the scam-hit banks with fresh capital?
Since the AL took office in 2009, taxpayers have paid Tk 14,505 crore for the so-called recapitalisation.
Many of us can recall how reluctant the government had been in catching the big bank scammers like Bismillah Group, Hallmark and the infamous former chairman of BASIC Bank Abdul Hye Bachchu. That Bachchu was ruining BASIC Bank, once a sound financial institution, was in everybody's knowledge. Only the government refused to act.
While the government has been so generous about the shady businessmen, it has fallen short of caring for the banks. Instead of reforming the banking system so that such ill practice cannot take place, the government has been following laissez-faire capitalism approach.
The day the budget for FY 2015-16 was passed in parliament, Muhith himself revealed the reality.
He said the government could not take punitive action against a top official of Sonali Bank for his involvement in the Hallmark loan scam due to interference from “our own men”.
“A deputy managing director was sent to jail. [But] a top official of Sonali Bank could not be sent to jail, because of the backing of our own people. I am very annoyed about this,” said Muhith.
In and outside of parliament, he on several occasions said Bachchu was involved in a loan scam involving Tk 2,200 crore.
An investigation by the finance ministry also found it to be true. But no action was taken against Bachchu.
Muhith cannot deny that he has a responsibility to bring discipline in the banking sector. But he cannot be solely liable for the job. The will of the government as a whole has been, and still is, a big factor as to why action cannot be taken against such scamsters.
Similarly, it was the government's decision to offer recapitalisation to the scam-riddled banks. Every year, the cabinet approved the budgetary proposals and parliament endorsed them. But all of a sudden, some MPs changed their mind forgetting what they did in the past years.
It was surprising that two ministers also blasted Muhith earlier for proposing a tax hike on bank savings. The ministers are part of the cabinet that approved the budgetary proposals. But when they opposed the proposal in parliament, they contradicted themselves. This goes against norms and practice of the parliamentary democracy and against the collective responsibility of the cabinet.
MPs should not put all the blame on Muhith for all the bad things in the banking sector. Without launching a personal attack, MPs should question the government's role in taking action against the people who plundered the banks. They should also examine the Anti-Corruption Commission's failure to act against the scamsters.
Is it rational to scapegoat Muhith alone?