IT IS unacceptable that state-owned commercial banks but for BASIC Bank Limited have provided three incentive bonuses for the staff before the recent Eid festival even though they failed to improve their financial position because of growing bad loans. The government even put in Tk 10,666 crore in bailout fund for them in three years since 2014-15 to meet their capital shortfall caused by loan scams. BASIC Bank received the highest amount of bailout fund of Tk 3,390 crore; Sonali Bank received Tk 3,003 crore and Janata Bank Tk 814 crore although Sonali Bank could not recover a single penny of the Tk 3,500 crore embezzled by the Hallmark Group in 2013. But 48,864 officers and employees of Sonali, Janata, Agrani, Rupali and Bangladesh Development Bank received the incentive in line with the decision of the bank boards. Their statement that the incentive received by the banks without informing the Financial Institutions Division looks ‘indecent’ because of huge bad loans in their loan portfolios.
As a former Bangladesh Bank deputy governor pointed out after it had been revealed that defaulted loans registered about 24 per cent increase in 2014, there may have been a marked decline in the skills of bankers and a drastic decay in their morality. However, besides professional and personal failures of the bankers, wilful or habitual loan default and financial crimes have also been committed because of partisan policies and actions of the government of the day. For example, the Awami League government has not only drafted people with proven or perceived loyalty to the ruling party in many key positions of scheduled banks, it has also sustained pressure on these banks to sanction loans to many individuals and institutions linked to the ruling party by bending rules and regulations. The central bank’s directive for the scheduled banks to bring defaulted loans down to 10 per cent of their total outstanding loans, even if it meant relaxation of the down payment ratio, is a case in point. The directive expectedly prompted a rescheduling spree by the banks, often in aberration from rules and regulations. A former interim government finance adviser rightly said that the central bank’s initiatives would bring more indiscipline in the coming days because the special consideration could very well work as an incentive for habitual defaulters to default on bank loans.
In any case, no matter how much money the government injected into the beleaguered banks for a sustainable recovery, it was unethical for these banks to award their staff three incentive bonuses before Eid when the banks should have forged a sustained war against wilful loan defaulters.
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