Public bodies must not be loan defaulters

16 September, 2020 12:00 AM printer

Various government organisations are created for the sole purpose of providing different services to the public. In fact, each and every state-owned entity has come into existence to serve a specific need of the people. Unfortunately, with the passage of time, officials and staff of many public service bodies seem to have forgotten the reason for their coming into existence. That is why people are not getting the desired quality and level of services from many public bodies like Bangladesh Power Development Board (PDB), Dhaka Power Distribution Company (DPDC), Chittagong Water Supply and Sewerage Authority (CWASA), Dhaka WASA, etc.

It has come to light that many of the service oriented government bodies have taken from five state-run banks huge loans, which are long overdue for return. This has led the banks concerned to seek intervention of the finance ministry to recover the loans worth more than Tk 290 billion from 13 public entities. Apparently, despite various efforts, the banks have been unable to realise the loans from those public bodies.

Various public entities may require funds to expand and upgrade services which they are supposed to provide to the public. For the purpose of financing their projects, such entities borrow funds from state-run financial institutions. This is well and good, provided that the loans are properly utilised, then it enhances the related public service sectors. As the people pay for the various services they receive from these entities, therefore over time the loans should be easily repaid with interest to the financial institutions.

If the service entities misuse the funds obtained on loan, then they will not only fail to provide enhanced services to the people, but also fail to repay the loans on time. Prolonging the loan repayment period will only lead to multiple issues for the organisations taking the loan as well as for the banks giving them, even turning them into bad loans.

Since bank deposits are used to fund the loans given by banks to various entities, therefore the public has all the right to demand proper utilisation of the money that belongs to them. As a member of the public we want to know where and how the funds have been (mis)used. Public spending accountability is needed to ensure good governance.