The government has put aside Tk 14,482 crore in the proposed national budget for re-capitalisation of the ailing state-owned banks plagued with various scams and irregularities.
Finance minister AHM Mustafa Kamal proposed the allocation while placing the national budget for the fiscal year of 2019-20 before parliament.
The government had allocated Tk 15,962 crore for such purpose in the budget for FY19 but the allocation was reduced to Tk 1,994 crore in the revised budget.
The government has already started utilising the FY19 allocation in recent months.
Different quarters have been criticising the government for keeping allocation of huge amount of taxpayers’ money for investment in share capital and for recapitalisation of the state-owned banks in the proposed national budget.
The country’s banking sector has been facing crisis due to a series of loan scams in the state-owned banks.
The amount of defaulted loans in the banking sector has been increasing over the years. The amount of defaulted loans skyrocketed to Tk 1,10,873.54 crore at the end of March, 2019.
Non-performing loans in six state-owned banks — Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Development Bank and BASIC Bank — constitute 48.6 per cent of the total defaulted loans in the country’s banking sector.
The banking sector witnessed a series of scams and irregularities over the last several years, with the latest scam involving Tk 3,572.98 crore in Janata Bank by five subsidiaries of Crescent Group and another involving Tk 5,508 crore by AnonTex in the same bank in the outgoing fiscal year.
In 2012, Bismillah Group swindled about Tk 1,100 crore from Janata Bank and Hallmark Group about Tk 3,500 crore from Sonali Bank in 2013.
In 2016, a Bangladesh Bank investigation found that Farmers Bank (now Padma Bank) sanctioned and disbursed loans and hid defaulted loans amounting to around Tk 400 crore in violation of banking rules.
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