People’s Leasing depositors must get back their money

Published at 12:00am on January 20, 2021

IT IS worrying that depositors of People’s Leasing and Financial Services Limited, passing through a liquidation process since July 2019, have not yet been paid back their deposits although the Bangladesh Bank assured them of deposit repayment when the liquidation process began. The depositors have held protests demanding their deposits. A platform that the depositors banded under says that about 6,000 depositors are in misery, with one reportedly having died of a heart attack because of the repayment uncertainty. Such a situation owes to the central bank’s failure in preventing the laundering of a huge amount of money by directors and other influential quarters of the non-bank financial institution. Aggrieved depositors now demand the repayment of at least their principal amount. The depositors have also asked the government and the Bangladesh Bank to take action against the central bank officials and People’s Leasing directors who are alleged to have been involved in the laundering of money.

The depositors demanding punitive action against the people involved in money laundering is well founded. The High Court in early January asked the Bangladesh Bank governor to look into allegations against some of its officials of harbouring and assisting financial thugs and misappropriation by way of influencing undue loan approval. The court also asked the governor to initiate an inquiry against some top central bank officials, including some deputy general managers and deputy governors. The involvement of some central bank officials resurfaced again in the case of People’s Leasing. The central bank, however, is reported to have taken no visible action yet. What is worrying is that while the central bank assured the depositors of repayment saying that it was working to protect the interest of depositors and shareholders, it has not been able to make People’s Leasing even begin the repayment. What is also worrying is that the central bank has not yet been able to bring People’s Leasing directors reported to have embezzled a large amount of money to book. Such a situation adds to the grief of the depositors.

The central bank, which examined the People’s Leasing assets in 2015–2019 and found the entity’s total asset value to be higher than its liabilities, must, therefore, make the entity repay the deposits at the earliest. The central bank must also look into the allegations of involvement of some of its officials in financial scams in People’s Leasing and other financial institutions. The government must take issues of financial sector misgovernance seriously to save the sector that appears to be bleeding profusely.