Another state-owned bank grappled with loan defaults

Sanaullah Sakib | Update:

Bangladesh Development Bank Limited (BDBL), a state-owned bank, is grappled with high level of loan defaults.  

The crisis of this bank came to limelight after Sonali Bank and BASIC Bank, two state-owned banks, suffered similar crises earlier.

About 60 per cent loans of the bank are defaulted due to irregularities and corruption.

The crisis is attributed to political influence in recruitment of the chairman and managing directors (MDs) and disbursement of loans attributes to such crisis. 

According to Bangladesh Bank, top officials also indulged in financial irregularities. 

On 3 January 2010, BDBL was formed after merging ailing Bangladesh Shilpa Bank and Bangladesh Rin Sangstha, two development financial institutions.

This bank has not been commercially viable since its inception. It is now limping for survival on house rent and share business.

This bank disbursed Tk1462 billion (one thousand 462 crore) till March this year. Out of it, Tk853 billion (853 crore) loans are defaulted. A total of 19 branches out of 39 incurred losses.   

Speaking to Prothom Alo, former deputy governor of Bangladesh Bank Khandker Ibrahim Khaled said this bank can't run commercially despite the merger of two organisations unless the accountability is established. The bank is now collapsing like other state-owned banks.

BB appointed observers to stop the irregularities and corruption, but there is no sign of improvement.

Managing director of BDBL Manjur Ahmed, "We are trying to recover defaulted loans and legal steps have been taken".

According to the financial report of the bank in 2016, the profit of the bank is decreasing gradually. In 2016, the net profit stands at Tk15 billion (15 crore) while it was Tk51 billion (51 crore) in 2015.

According to information obtained from BB and BDBL,   

The bank has dues of Tk358 billion (358 crore) to 20 top defaulters. Tk247 (247 crore) billion was disbursed since the inception of BDBL. Zillur Rahman was MD of the bank for five years. He joined in February of 2011. Lion shares of defaulted loan were disbursed through him.

A number of organisations involved in loan defaults were established in his locality. Now he is chairman of Islami Bank audit committee.

Speaking to Prothom Alo, Zillur Rahman said, "It is not the fact, entire loan defaults took place during my time. Some loans were defaulted. During my tenure, there were problems in entire system of the bank. I alone can't disburse loans alone, it is disbursed following different levels of process".

The highest loan defaults were recorded in 2012.

The bank had dues Tk76 billion (76 crore) to Chittagong-based MA Vegetable Oil, an organisation of Mostafa Group. Chairman of Mostafa Group of Industries is Hefazatur Rahman.

Vice chairman of Mostafa Group Shafique Uddin told Prothom Alo, loans could not be paid for various reasons. "We have started the process of rescheduling it."

The second top defaulter is Dhaka Trading House. The loan disbursed in 2012 now stands at Tk42 billion (42 crore).

It’s proprietor Tipu Sultan from Zillur Rahman's locality. availed the loan facility.

His office is at Al-Razi Complex at Purana Paltan in the capital. No one was found there.

Tipu Sultan's other enterprise is TR Specialised Cold storage which is the fifth top defaulter, among others. The bank has dues Tk13.19 billion (13 crore 19 lakh).

BDBL chairman Yeasin Ali said."No irregularities happened after had come the chairman. I am trying to recover the defaulted loans".

Khandker Ibrahim Khaled said those, who are behind the irregularities and corruption, have to be identified and brought to book. And those involved in corruption and irregularities of Sonali Bank and BASIC Bank also have to be tried. 

 

*This report, originally published in Prothom Alo Bangla, has been rewritten in English by Rabiul Islam

   
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