Bangladesh’s minister for legal action against financial scamsters

Finance Minister AMA Muhith yesterday directed the BASIC Bank to take legal action against those involved in irregularities at the scam-hit bank.

He was in a special meeting with the newly appointed board of the state-owned bank, led by its Chairman Alauddin A Majid. This was the first meeting of the incumbent board with the minister.

The board was reconstituted in July last year against the backdrop of the serious scam committed during the tenure of the previous chairman Abdul Hye Bacchu.

Muhith instructed the board to send its latest documents to the Anti-Corruption Commission to enable the graft watchdog to file cases against the accused.

He asked the bank to lodge cases against bankers and customers 

involved in the scam.

During the meeting at the finance ministry, the board presented a dismal picture of the bank.

The board told the minister that a clear-cut robbery took place at the bank, not only in the case of loan disbursement, but also at many other levels, including recruitment, opening of new branches and renting offices from parties for the branches, said meeting sources.

In 2009, the total staff at the bank was 776 which went up to 2,237 in December last year. Many staff were recruited in exchange for money, said board members.

The bank had 32 branches in 2009, but the figure increased to 68 by the end of last year. Most of the branches are now incurring losses. Some 700 staff are now without any work.

Muhith asked the board to engage the 700 in realising default loans.

The new board conducted an audit on all the default loans of over Tk 5 crore. It also carried out an external audit of these loans case-by-case.

The minister advised the board to send these cases to the ACC so that it can act against the influential people.

The board said it identified all the loans sanctioned in the last one year and also the particulars of the borrowers.

The bank was trying to realise the loans through negotiations. It would go for legal action against borrowers if loans can't be realised through negotiations.

Loans amounting to Tk 263 crore, including Tk 110 crore from classified borrowers, were realised since the new board took over.

The board took departmental action against 39 staff, of which 14 have been dismissed and 18 suspended.

Talking to reporters after the meeting, Muhith said people including the former chairman of BASIC Bank would be brought to justice, no matter how powerful they were.

“The new board has already prepared a report identifying where and how corruption took place. The Anti-Corruption Commission will be asked to take necessary action on the basis of the report,” he added.

The bank is riddled with problems because of the illegal non-banking activities by former chairman Abdul Hye Bacchu, said the minister. “We have evidence of many of his non-banking activities. So it won't be a problem to take action against him.”

MORE FUND SOUGHT

The BASIC Bank board in the meeting sought more fund from the government to meet its capital deficit, which was Tk 3,634 crore as of March.

The minister assured the board of giving it the money from the current fiscal year's budget.

The bank got Tk 1,200 crore in the last fiscal year to meet its capital deficit. It has the highest 57 percent of bad loans among all public banks.

The total outstanding loan of BASIC is Tk 8,964 crore, of which Tk 5,080 crore is defaulted.

The financial statement of the bank for 2014 said there were significant weaknesses in the documents of loans disbursed from 2010 to 2014. There was no internal control over granting loans.