No useless allocation for banks | 2019-06-10 | daily-sun.com

No useless allocation for banks

9th June, 2019 10:31:39 printer

The continued bailing out of losing state-run banks indicates a very unhealthy trend in the country’s financial sector. It will not be wrong to say that their performance is not at all satisfactory. In fact, they continue to lose money due to inefficiency and corruption. Unlike many private banks, the performance of the state-run banks is a shame as their allocated money is lost in a bottomless pit. Bangladesh can ill-afford such waste of public money.

It is well-known that the mountain-high classified loan remains a major stumbling block for the country's financial sector and the overall economy. In this challenging and competitive world, it is pushing the country backwards and holding back the growth momentum the country needs to maintain for achieving the higher economic statuses by 2021 and 2041.

It is perplexing to note that the bailing out of banks has become common in every fiscal year.  According to official data, in total Tk 18, 000 crores was injected into the banks in the last ten years from 2009-10 to 2018-19 fiscals.  It is understood that the total shortfall of capital in the six state-run banks amounts to a staggering Tk 25,130 crore till December, 2018. As per the plan, these banks are going to get an allocation of around Tk 1,500 crore again in the 2019-20 budget.

This is a huge financial burden for the government and is a direct result of graft. The clearing of a huge amount of money almost without any collateral by “overlooking” fake documents, fictitious names and entities in violation of the very basic rules and regulations of the bank is nothing but cheating and looting of money in broad daylight.

Experts opined that losing money to cover the bank's deficit has become a tradition. The government continues to lose money though it is notable that little of the money has been recovered so far which was lost in the biggest loan scams in the last decade. Obviously, it is a useless investment. Had the money been invested in productive projects, it would have provided leverage to the country's economic growth.

Thus, the only step is to find ways to stop such bail-outs, punishments for poor performance and graft. Above all appointment of honest and competent staff might plug the road to the bottomless pit to make these banks healthy.

 


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