Tk 92,000cr embezzled through loan scams since 2008: CPD
More than Tk 92,000 crore have been siphoned out of the banking sector through 24 major loan scams since 2008, according to the Centre for Policy Dialogue (CPD).
The independent think-tank comes with the figure of fund embezzlement from the financial sector by compiling reports published in the media between 2008 and 2023, it said at a media briefing today to share its observation on the state of Bangladesh's economy in the fiscal year 2023-24.
The compilation of published reports outlines major cases in the banking sector between 2008 and 2023, amounting to more than Tk 92,261 crore, said CPD Executive Director Fahmida Khatun, raising concern about the health of the banking sector amid rising defaulted loans and the influence of a few in the sector.
"The banking sector is in the grip of crony capitalism. The crony capitalists have used banks as vehicles for reaching their goal of financial oligarchy," said Fahmida.
The CPD said non-performing loans (NPLs) are still unchecked, threatening the health of the financial system.
Bangladesh's banking sector has consistently demonstrated vulnerability, primarily because of a lack of good governance and a dearth of reforms, according to the CPD.
"Its weaknesses have been consistently exposed through high loan default rates and sub-par performance across various indicators. This inherent fragility presents significant risks to the overall economy," she said
"Regrettably, the government's commitments to safeguard the banking sector remain unmet."
Considering recurrent instances of fraudulent activities and irregularities, the actions implemented by the government have been insufficient, she said in a presentation.
It said the total volume of bad loans has increased by more than three times in the last ten years -- from Tk 42,725 crore in the fourth quarter of the fiscal year 2011-2012 to Tk 156,040 crore in the fiscal year 2022-23
However, actual bad loans will be much higher if loans in special mention accounts, loans with court injunctions, and rescheduled loans are included, said the CPD.