Big state-owned banks in problems, says Muhith

Staff Correspondent

Finance minister AMA Muhith on Monday said condition of the big state-owned banks was not good.
‘They are in problem,’ he said at a function held for dividend handover of Tk 10 crore by Bangladesh Development Bank Limited, a state-owned specialised bank, at his secretariat office.
He did not point out the reasons but hinted at loans scams in Sonali Bank and BASIC Bank during the last few years that caused such poor condition of the state-owned banks.
It was exceptional that a small bank like BDBL paid dividend when state-owned banks had to be recapitalised for their capital shortfalls, he said.
The government has provided Tk 2,300 crore to the BASIC Bank in the last two years to meet its capital shortfall caused due to shady lending spree.
BASIC bank became bankrupt due to massive corruption and shady credit deals approved by the bank’s board of directors led by former chairman Sheikh Abdul Hye Bachhu.
No action was taken against Bachhu though probes found that hefty loans were extended to fictitious borrowers under his initiative.
Another loan scam hit bank—the Sonali Bank—was also provided recapitalization fund worth more than Tk 2,600 in two tranches in 2014 and 2015.
Sonali failed to realise a single penny during the last couple of years out of the swindled Tk 3,500 crore by little-known Hallmark Group in 2012.
Muhith lamented that the state-owned commercial banks were a complete failure.
Last week, Muhith described the loan scams in the state-owned commercial banks as ‘dacoity’.
What happened in Sonali Bank and BASIC Bank were nothing but pure and simple dacoity, he said while speaking at the state-owned Janata Bank’s annual conference 2016 at a city hotel.
He said it would take time for Sonali and BASIC to regain their previous standing in the banking sector after the loans scams they suffered.

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