No let-up in public fund embezzlement

Published: 21:44, Oct 08,2016

 
 

THE Equity and Entrepreneurship Fund of the Bangladesh Bank, which came into force in 2004 with an aim to promote entrepreneurship in different sectors such as agriculture and information technology, has already become a tool for swindlers to siphon off public money. As New Age reported on Saturday, 229 projects that borrowed Tk 528.45 crore at zero interest rate as capital from the fund are yet to repay Tk 348.32 crore although the eight-year repayment period has already expired. Worse still, a significant portion of the amount is unlikely to be ever recovered as many companies that took loans giving false addresses could not be traced. Additionally, the Investment Corporation of Bangladesh, responsible for handling the fund, cannot file money suits with the Financial Loans Court against the defaulters as the fund disbursed without mortgage is not defined as loans in keeping with the provisions of the Financial Loans Court Act 2003. In this context, some central bank officials have rightly pointed out that the fund was essentially intended to patronise political activists.
What is more worrying is that despite the bitter experiences, the government is yet to stop disbursing loans from the fund although the central bank and the investment corporation stopped accepting fresh applications for such loans on June 30, 2014. Besides, it is yet to respond to the central bank letter sent in August with proposals to close the fund or create a refinance scheme through a separate company. Meanwhile, the government appears willing to continue with the fund at a time when Tk 1,342.94 crore against 872 projects have been disbursed from the fund as of September 30, 2016, but the amount recovered in the period was only Tk 227.93 crore. That apart, a survey that the Bangladesh Institute of Development Studies conducted in 2014 found that at least 77 companies that borrowed Tk 289 crore from the fund disappeared. One could, indeed, be forgiven to think that the reason the government is yet to close the fund is not different from the one for which it has rampantly politicised the management of state-run banks ever since its assumption of office in 2009, paving the way for turning the banks into swindlers’ paradise. It can be recalled here that Sonali, BASIC and other state-run banks lost thousands of crore of takas in the period mostly because of people who reportedly enjoyed ruling party blessings. But those who belonged to the boards of directors of the banks and were allegedly complicit in the embezzlement are yet to face any legal action from the government for the crimes.
The government immediately needs to stop all forms of embezzlement of public money apart from closing the fund at hand. It also needs to take effective steps to recover all the money disbursed from the fund without considering the political camp the defaulters belong to. Above all, conscious sections of society need to raise their voice in a sustained manner in this regard.

 

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