Info barred by central bank

Bangladesh Bank presented a list of top twenty five loan defaulters to the Parliamentary Committee on Finance Ministry recently. However, the central bank has not yet unveiled the names and profiles of top twenty five loan borrowers who obtained enormous figures of loans from different banks reportedly by exercising political influence and submitting insufficient mortgages. 

These loan recipients are highly influential and they have robust control over the boards of directors in most of the state-run and private banks, relevant sources have informed.

Esteemed citizens and financial experts have stressed that the country's people deserve to know in details about all loan defaulters and loan recipients. Hiding information about people who receive big amounts of loans is a major obstacle for the establishment of accountability and good governance in banking and financial activities, monetary analysts have said

The Asian Age spoke to several higher officials of Bangladesh Bank but they did not provide any information about the loan recipients who, according to banking platforms, have transformed the country's entire banking sector into their hostages. If information about top borrowers is not disclosed by the central bank it will further raise the malpractice of mishandling bank loans among powerful clients, economists have remarked. 

Financial sources have further revealed that voluminous amounts of loans clinched by big shots are often being rescheduled and written off by the central bank to give them undue privileges which is a breach of banking ethics. Bankers have said that a defaulted loan can be rescheduled up to highest three times but some loans are being rescheduled ten to twelve times due to nepotism and political pressure 

which is a gross violation of banking principles. 

Banking authorities most of the time show downright noncooperation to honest entrepreneurs including small and medium enterprises over monetary assistance who have fair business backgrounds but extensive amounts of loans are being frequently disbursed to financial scammers, such allegations have also come up from sources related to banking administration.

In light of the data earlier unfolded by Bangladesh Bank, the percentages of classified loans have mounted to double digits during last couple of years. Information from trustworthy angles shows that during 2015 and 2016 the percentage of classified loans was 8.79% and 9.23% respectively.

 However, it reached 10.67% in September 2017.  Finance Minister AMA Muhith has recently stated that the banking arena is heavily inflicted with bad debts of 65 thousand crore taka. The total sums of defaulted loans have in the meantime reached 1 lakh 35 thousand crore taka including Bangladesh Bank's written off debts, financial sources have stated.

AMA Muhith informed Parliament last week that seven banks are undergoing a hazarded plight with capital deficit reaching over 9,000 crore taka. Among these seven banks there are four state-run banks while another three banks are private ones. On the other hand, managing directors of different banks have reportedly asked for 20, 000 crore taka from the government to overcome their capital crisis.

 Liquidity shortage has unsettled some private banks. Sources associated with banking hierarchy have said that all these things are scary signs for the country's economy.

The amount of defaulted loans of top 25 defaulters reached BDT 9,696 crore up to September 2017, according to Bangladesh Bank's list. The amount of  defaulted loans of Mohammad Ilias Brothers is BDT 889.49 crore, Quantum Power Systems Ltd BDT 558.9 crore, Jashim Vegetable Oil Ltd BDT 547.95 crore, Max Spinning Mills BDT 525.60 crore, Benetex Industries BDT 516.94 crore, Dhaka Trade Housing BDT 485.29 crore,  Anwar Spinning Mills BDT 474.37 crore, Siddique Traders BDT 428.57 crore, Yasir Enterprise BDT 414.80 crore, Alfa Composite Towels Ltd BDT 401.73 crore, Legend Holdings BDT 347.85 crore, Hallmark Fashion Ltd BDT 339.34 crore, Mac International BDT 338.74 crore, Monno Fabrics BDT 338.37 crore, Fair Trade Fabrics BDT 322.4 crore, Saharis Composite Towel BDT 312.96 crore, Nurjahan Super Oil Ltd BDT 304.49 crore, Keya Yarn Ltd BDT 292.53 crore, Saleh Carpet Mills BDT 287.1 crore, Fair Yarn Processing Ltd BDT 273.16 crore, SK Steel BDT 271.48 crore, Chowdhury Knitwear BDT 269.38 crore, Help Line Resources Ltd BDT 258.30 crore, Six Seasons Apartment Ltd BDT 254.57 crore and Bismillah Towels Ltd BDT 243.84 crore.     

Bangladesh Bank's former deputy governor Murshid Quli Khan said to The Asian Age, "The augmentation of defaulted loans has hit the country like a plague. If required, the concerned laws need to be amended to expose the names and particulars of loan borrowers who do not pay back their debts."

Dr. Zahid Hossain, Lead Economist, World Bank, Bangladesh Office told The Asian Age, "It should be scrutinized for what reasons information about influential loan borrowers is not being exposed. Proper actions cannot be taken against financial culprits if the authorities do not disclose relevant details."

Mujahidul Islam Selim, President, Communist Party of Bangladesh (CPB) said to The Asian Age, "All people of the country have rights to know what is happening in the banking system including loan disbursement. All the defaulted and borrowed money belongs to the country's citizens. Therefore, there is no valid point in hiding information about bank loans."

On the other hand, Professor Anu Muhammad, Jahangirnagar University told The Asian Age, Everyone in the country has right to know to whom bank loans are being issued and on what basis these loans are paid. The regulatory authorities should inform people clearly what measures they have so far taken to tackle loan scams.