Editorial
A public bank in dire straits
Symptomatic of deeper ailments
HOT on the heels of Sonali Bank, the news of yet another state-owned bank landing in the soup is deeply disturbing. Audits carried out by the central bank have unearthed massive irregularities in three branches of Basic Bank. Of the loans worth Tk60 billion disbursed, 78 per cent has been termed as "classified". While we have been assured that a special task force has been formed to track down these nonperforming loans in an attempt to recover them, we are not particularly encouraged because of the dismal performance of Sonali Bank to recover the billions of Taka that have been siphoned off and nothing of substance has been recovered.
The BASIC bank fiasco merely reinforces the belief that we have not taken any lessons regarding adherence to basic bank rules and regulations. That the Gulshan branch of the bank could give out loans worth Tk2.7 billion against deposits of Tk1 billion defies all logic and procedure. There was violation of banking norms and rules. The fact that the bank's board sanctioned loans to nonexistent companies and gave approval for loans and instant accounts were opened. Indeed, when one takes into account that the Board sanctioned loan proposals even before the document reached head office smells of a massive scam operation that was ongoing before central bank audit teams finally caught wind of it. How many more scams will it take before policymakers wake up to the reality that a fundamental reorganisation of board banks is the need of the hour?
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