Editorial
The ghost of Hall-Mark lives on
Bad loans decimate state-owned banks
IT would appear that policymakers have taken no lessons from the Hall-Mark scam, which until recently had been touted as the single largest scandal in the banking sector. Yet, what we are witnessing to our utmost dismay is that far from taking steps to plug loopholes that allowed for the scam, all manner of checks and balances pertaining to sanctioning of loans in state-owned commercial banks are wilfully being bypassed opening the door for even bigger scams.
Going by newspaper reports, BASIC bank has suffered a scam worth Tk3,493 crore. It is interesting to note that whereas the Board of Directors of Sonali Bank claimed they had no knowledge of what was going on with loans to Hall-Mark, it is BASIC bank's board that has enabled the siphoning off of funds. The level of political influence in the state-owned banks has reached phenomenal proportions, which open up the possibilities of improper sanctioning of loans. Such 'appointees' inevitably find allies in a coterie of corrupt bank officials who play a key role in facilitating corrupt practices. A similar situation exists in Agrani Bank that is suffering from bad loans amounting to approximately Tk.2885 crore.
In the midst of all this, the government is in the process of injecting an additional Tk5,000crore into four state-owned commercial banks. Is it any wonder that banks like Sonali and Agrani are suffering capital shortfall, especially in light of the massive cases of irregularities witnessed. Precisely what will new infusion of capital achieve when remedial measures to rectify systemic faults and punitive actions against those involved in scam making are missing, is a question that has largely been left unanswered.
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