Govt must make central bank behave to stop financial scams

Published: 00:00, Feb 25,2021

 
 

THE proposition, as it came up in the observation of the High Court when it heard statements of 53 loan defaulters of People’s Leasing and Financial Services on Tuesday, that some officials of the Bangladesh Bank, responsible for the oversight of activities of non-banking financial institutions, are beneficiaries of the financial scams that took place in different non-banking financial institutions and they illegally facilitated top officials of such companies, is gravely disparaging. The court also says that it is not the responsibility of the court to look into matters of financial scams and irregularities and it is, rather, the duty of the central bank to investigate such matters. The observations point to the failure of the government in taking any action against the Bangladesh Bank officials, on investigations, who are alleged to have been involved in various financial scams earlier. The absence of any punitive measures, in turn, also suggests ineffectiveness, which could even be unwillingness, on part of the authorities concerned to properly investigate the horde of scams that have plagued the financial sector and let down the economy.

The High Court is reported to have issued 70 orders on the Bangladesh Bank in the past couple of years, directing the agency to discharge its mandated responsibilities in various financial scams and irregularities that mostly non-banking financial institutions carried out. The court, for an example, in its judgement of January 6 in a case of the embezzlement of Tk 5 billion from the Bangladesh Industrial Financial Company Limited by Prashanta Kumar Halder expected the governor of the central bank to look into the financial scams so that corrupt businessmen in collusion with unscrupulous central bank officials can no longer plunder public coffers. The High Court earlier asked the Bangladesh Bank governor to look into allegations levelled against some central bank officials of harbouring and assisting financial thugs and financial misappropriation by influencing undue loan approval. In the case at hand, while the court criticised the central bank governor for failing to take action against corrupt employees alleged to have connections with financial fraudsters and others involved in scams, it also rebuked the chairman of the Anti-Corruption Commission for failing to take any action in time. The High Court in June 2019 directed both the central bank and the Anti-Corruption Commission to take action against PK Halder. All this brings to the fore a glaring failure of relevant agencies and a government indifference to dealing with issues of large-scale financial scams once and for all.

The Bangladesh Bank must, therefore, properly investigate the allegations of corruption levelled against its ranking officials and their involvement in different financial scams and irregularities. The government must also step up its oversight of the central bank and go for a complete overhaul if it is required to purge the financial regulatory agency of corrupt elements. It is also expected that the Anti-Corruption Commission would set out inquiry and investigation to this end.

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