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Taxpayer money for bailing out banks lines pockets instead

  • Published at 04:58 pm March 28th, 2018
  • Last updated at 05:50 am March 29th, 2018
Taxpayer money for bailing out banks lines pockets instead
A sizeable portion of the taxpayer’s money – Tk2,000 crore to be precise – is earmarked in the budget for recapitalization of banks. The budgets for the 2016-2017 and 2017-2018 fiscal years has seen Finance Minister AMA Muhith ensure Tk2,000 crore is always set apart to help cover the massive deficit of various banks. The trend is expected to continue in the upcoming budget as well. According to experts, the decision to bail out banks instead of forcing them to comply with regulations and collect from loan defaulters is sending the wrong message, further encouraging misappropriation of the taxpayer’s money. Dr Salehuddin Ahmed, former governor of Bangladesh Bank, said there was no plausibility behind wasting the taxpayer’s money by using it to salvage banks. He said: “By not rooting out corrupt elements from the banks, by not forcing them to make good on their default loans, by keeping a separate fund to bail them out, we are just encouraging corruption and misrule.” According to a Centre for Policy Dialogue (CPD) report, between the 2008-2009 and 2015-2016 fiscal years, banks have been disbursed Tk11,705 crore as recapitalization. CPD Fellow Dr Mostafizur Rahman said: “If the money was allocated to develop healthcare, education, or other social welfare sectors, it would have been money well spent. Dr Zaid Bakht, chairman of Agrani Bank, said: “If the government banks started charging for the free services they provide the government, they can recuperate a lot of money and may not need so much funding from the budget every year.” Over the past four years, BASIC Bank has received Tk3,390 crore, Sonali Bank has received Tk3,003 crore, Janata Bank Tk814 crore, Agrani Bank Tk1,081, Rupali Bank Tk310 crore, and Bangladeshi Krishi Bank Tk729 crore. Policy Research Institute Executive Director Dr Ahsan H Monsur said: “In every country in the world, if there is a problem, people look for solutions. But only in Bangladesh we allocate more money so that it gets misappropriated.” State-owned banks or state-draining banks? Six nationalized banks have asked the Finance Ministry for over Tk20,000 crore. Sonali Bank, notorious for losing Tk4,500 crore in the Hall-Mark scandal, has asked for Tk6,000 crore for recapitalization. Janata Bank has asked for Tk2,500 crore, putting its Tk5,405 crore worth of default loans to Anontex Group in the distant past. BASIC Bank wants Tk2,500 crore after losing Tk5,000 crore. Rupali Bank has asked for Tk1,250 crore, Bangladesh Krishi Bank has asked for Tk7,348 crore, and Rajshahi Krishi Unnoyon Bank has asked for Tk800 crore. The six nationalized banks have more default loans than the 39 private banks combined. And it is the common people who have to pay for their incompetency. South Asian Network on Economic Model Executive Director Dr Selim Raihan said the public have to bear the brunt of the rampant corruption in public banks. “This money is being siphoned out of the banks and lining the pockets of people against whom no actions are being taken. People are losing faith in the banking sector.”   This article was first published on banglatribune.com
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