Farmers Bank loan scandal: TIB calls for confiscating shares, paying back depositors

Transparency International Bangladesh (TIB) has urged the authorities concerned to confiscate the shares of the people involved in the Farmers Bank Ltd loan scandal and pay back the depositors with the money from those shares. In a press release issued on Thursday, TIB said it was making the call as the bank has failed to return the deposits of its clients despite repeated calls from various quarters. The graft watchdog also said it was matter of concern that Bangladesh Bank’s investigation has also found new information regarding the loan scandal, irregularities and fraudulent activities in Farmers Bank. [caption id="attachment_231806" align="alignleft" width="300"] File photo of TIB Executive Director Iftekharuzzaman Dhaka Tribune[/caption] In the press release, TIB Executive Director Iftekharuzzaman said after the central bank expressed fear that more than half of the money Farmers Bank has disbursed in loans would not be repaid, the depositors were now living in uncertainty. “The public is also losing its confidence in the banking sector. Farmers Bank authorities, specially the former directors, cannot avoid their responsibilities over the corruption and frauds that have left many of their clients in disarray,” he said. He also called for exemplary punishment of the bank’s former top brass as proof of their involvement in the loan scam was found in the Bangladesh Bank’s investigation report. Farmers Bank, approved on political consideration, had made headlines in 2017. Among the newly-approved nine banks, it had the highest amount of default loans at the end of December last year. According to Bangladesh Bank, Farmers Bank’s defaulted loans had swelled to Tk723 crore at that time, which was 14% of its loans. A year ago, the bank had default loans of Tk171 crore. Currently, Tk339 crore of its defaulted loans have turned into bad debt. Established by former home minister MK Alamgir, the bank is nearing bankruptcy due to massive irregularities and corruption. The clients are not being able to withdraw their money due to fund crunch. All sorts of the bank’s clients have applied for withdrawing their money but the bank is returning their applications every time. Not only that, the bank has expressed inability to return the money – Tk508 crore – of the government’s climate fund.