No more bail-out fund for BASIC Bank

Published at 10:03pm on September 30, 2016

The BASIC Bank request for another round of bail-out fund is unacceptable. The scam-ridden bank requested, as New Age reported on Friday, Tk 2,600 crore in interest-free recapitalisation bonds for the purpose. Moreover, as officials said, the bank and financial division will decide the matter next month. This is for the third time since 2014 that the state-run bank has sought bail-out money. In 2014, the government gave it Tk 1,100 crore to bridge deficit in the provision shortfall. In January, the bank received Tk 1,200 crore from the public coffers for a similar purpose. The bank, despite all this, however, continues ailing. The bank, which used to make profit, began to sink in 2013 when it disbursed shady loans one after another. Such lending exceeded Tk 6,000 crore in September 2014 and at least Tk 4,500 crore of which is believed to have been swindled. In this context, experts, apart from opposing the bail-out programme, have several times suggested that the commission should be set up to establish the reasons for the situation as other state-run banks such as Sonali, Janata and Agrani face similar problems as well.
But, not heeding all this, the government gave bail-out funds to scam-hit state-run banks, including BASIC Bank, that too repeatedly. What is more regrettable is that the government has so far turned deaf ears even to the recommendations of the Bangladesh Bank for drastic action against the people responsible for shady loan disbursement. It is true that the Anti-Corruption Commission has already lodged cases against several officers and employees of BASIC Bank after inquiry in this connection and many of the accused are in jail now. But it is also true that the then chairman of the bank, accused by the central bank investigators of masterminding all the scams, is still at large. Besides, the corruption watchdog is reported not to have felt the need for making serious efforts to establish the allegations that the central bank levelled against him who reportedly enjoys political clout. None can deny that such a lackadaisical government approach to dealing with the BASIC Bank scam cases has emboldened its current management not to be serious enough about the recovery of the public money disbursed in shady loans. Nor has they become serious about recovering other defaulted loans.
The government needs to realise that it is giving the bail-out funds depriving various sectors that involve high public interest, including education and health, of what they deserve in allocations from it. In other words, more bail-out funds for BASIC or other scam-hit banks mean further punishing people for crimes perpetrated by a handful of criminals having government blessings. Above all, by doing this, the government sets a bad trend of bail-out funding and this could only weaken the banking sector as a whole. The government is, therefore, well advised not to give the bail-out fund that BASIC Bank has sought.