EDITORIAL
Is Janata Bank above banking rules?
According to the findings of multiple Bangladesh Bank investigations, Janata Bank has been granting undue favour to yet another big borrower breaking all sorts of banking rules. The borrower, Thermax, was granted these privileges despite paying only a fraction of its previous dues which now stand at a staggering Tk 1,230 crore.
Having failed to pay back the money against previous Letters of Credit, Thermax should have been automatically disqualified from utilising the LC service until it cleared the outstanding loan—which it wasn't, being allowed to repeatedly open fresh LCs by Janata Bank. This led to the company receiving LC benefits worth more than three times the ceiling without approval from the bank's board, again in violation of BB rules. As a result, Janata's total outstanding loan to Thermax exceeded the single borrower exposer ceiling of 15 percent set by the BB and the 25 percent limit set in the Bank Company Act 1991.
Despite a number of questions being raised in regards to the workings of the company, according to BB officials, 27.5 percent of Janata Bank's capital was given to Thermax as of December last year, which reeks of corruption. Yet, what is most outrageous is that the bank has been doing all this with public money for years without any intervention by the regulators.
How long will such blatant squandering of public money by Janata Bank and others continue? Is this not a direct result of the impunity that has been granted by regulators to corrupt and inept individuals in the banking sector?
In the interest of curbing such mismanagement and corruption now, we call on the regulators to forcefully implement the set rules and strictly punish those found to have violated them.
- Courtesy: The Daily Star/ Oct 22, 2018
- Link - https://goo.gl/KSS8Eg
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