Jasim Uddin Haroon The state-owned Bangladesh Development Bank Limited (BDBL is selling out !oreclosed land at rates !ar "elow the market prices# people !amiliar with the matter have told the $%& 'n an average each year the BDBL is selling land o! () pro*ects o! its loan de!aulters# worth more than Tk +&) "illion# out o! (() such pro*ects# since its inception through the merger o! the Bangladesh ,hilpa Bank (B,B and the ,hilpa -in ,angstha (B,-, in .)+)& This year the num"er o! sold-out industrial plots may rise to /)# according to o!!icial sources with the "ank& The industrial plots with all in!rastructure !acilities including those o! power and gas connections are located in di!!erent industrial hu"s at prime locations o! the country& 0ndustrial upland with ready in!rastructures is very scarce in the country and the prices are surging "y leaps and "ounds every year& The sale o! such ready industrial plots "elonging to loan-de!aulter entrepreneurs is reducing the BDBL1s earnings to a large e2tent and also encouraging an un!air means in the country1s key !inancial sector# sources said& ,ources in the real estate sector said prices o! the land would "e at least two to three times higher# i! those had "een sold competitively at the market prices& 0nsiders said in many cases the !inancial institution has "een a"using the government1s order regarding recovery o! the cost o! !und# issued in $e"ruary# .))3& 4ccording to the government order# in cases like natural calamities and death o! owners# the "ank can accept prices "elow the cost o! !und in selling the pro*ect land o! de!aulter- "orrowers& The BDBL has sold out a num"er o! such plots over the last si2 months& 0t sold out the ,hah 5ukdom Te2tile 5ills in the B,606 estate in -a*shahi at much lower prices& $% +)&++&.)+. Muhith hints at appointing politicians to SCBs' boards Politicians# among others# are likely to "e inducted into the "oards o! the state-owned "anks within the ne2t !our to !ive days# $inance 5inister 454 5uhith said ,unday& 7Political personalities are also in trade# industry and education& ,ome o! them may "e appointed& 0 don1t know#7 5uhith told reporters when asked a"out his stance on the appointment o! "ank directors on political consideration& 0t is di!!icult to make a distinction "etween a "usinessman and a politician as politicians are also involved in "usiness and industry# he argued& 7,ome o! them might "e there ("oards#7 5uhith said# adding many non-political personalities were appointed as directors in the state-owned "anks& The minister was talking to the newsmen a!ter holding a meeting with Turkish La"our and ,ocial ,ecurity 5inister $auk 6elik at the %conomic -elations Division (%-D& 6urrently# a"out 8) posts o! directors in +) state-owned commercial "anks (,6Bs and specialised "anks are lying vacant !or more than two months& The tenure o! most o! the directors and the chairmen o! !our ,6Bs -- ,onali# Janata# 4grani and -upali -- e2pired in early ,eptem"er last& The government reappointed all !our chairmen o! the ,6Bs !or a period o! one to two years in mid-,eptem"er& The 5inistry o! $inance (5o$ also reappointed !our directors to !our ,6Bs !or a period o! two years& Besides the ,6Bs# most o! the posts o! directors in state-owned specialised "anks -- Bangladesh 9rishi Bank# -a*shahi 9rishi Unnayan Bank (-49UB# 4nsar-:DP Bank# B4,06 Bank# Bangladesh 9armashangthan Bank and Bangladesh Development Bank have also "een lying vacant !or long# sources said& '!!icials at the 5o$ said "oards o! !our state-owned commercial "anks (,6Bs will "e reconstituted !irst& ,peciali;ed "anks would !ollow& They said hectic lo""ying is continuing "y the leaders and those loyal to ruling Bangladesh 4wami League to have their place con!irmed in the "oards o! government- owned "anks& $% +.&++&.)+. Dictated loans major sources of SCB troubles BB suggests actions to improve situation <a;mul 4hsan The Bangladesh Bank (BB has proposed a string o! measures to the 5inistry o! $inance (5o$ to shore up the trou"led state-owned commercial "anks (,6Bs& Putting an end to the practice o! sanctioning loans under pressure !rom power!ul =uarters and stopping the purchase o! loans o! =uestiona"le =uality !rom private commercial "anks (P6Bs -- are two ma*or steps suggested "y BB to help !our ,6Bs to strengthen their !inancial "ase and overcome their image pro"lem# a central "anker said& 7'ur suggestions to 5o$ to revive the status and image o! !our ,6Bs need special attention o! the !inance ministry o!!icials as directives !rom them to senior "ankers o! state-owned "anks matter most#7 a top BB o!!icial told the $% on >ednesday& He said the BB is also serious a"out en!orcing the measures# su"mitted to the ministry# in all !our ,6Bs -- ,onali# Janata# 4grani and -upali& The proposals o! central "ank said the ,6Bs must "ring an end to all !raudulent activities involving the sanctioning and dis"ursement o! loans& The BB in its proposals said the ,6Bs have to comply with the directives o! BB on managing their loan port!olios and asset =uality to avert any de"acle in the !uture& The "anks under no circumstances should e2ceed the approved limit o! large non-!unded loan and they must secure approval !rom their chie! e2ecutive o!!icers in the process o! sanctioning large amount o! non- !unded loan& The "anks also should undertake special drive to recover their huge classi!ied loans# BB proposals said& $urthermore# the proposals said without meeting the credit risk grading and due diligence no new loan should "e sanctioned& Besides# the ,6Bs should !ully comply with the conditions set in the 5emorandum o! Understanding (5oU signed with the BB and initiate special audit o! its all "ranches# i! needed& The BB o!!icials said the ma*or pro"lems lie with ,6Bs in granting loans "eing in!luenced "y power!ul =uarters o! the government ignoring the "asic !undamentals and re=uirements in lending criteria& 70n many cases# we have to entertain re=uests or orders !rom top policy makers o! the government in sanctioning "ank loans to undeserving entities or individuals#7 a general manager o! an ,6B told the $%& 7>e are threatened with dire conse=uences like termination or trans!er !rom power!ul =uarters in case we e2press ina"ility to sanction loan or re!use to provide any unethical loan rescheduling !acility#7 he added& $% +8&++&.)+.
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amakal+?&++&.)+. BB likely to get power to remove MDs of SoBs <a;mul 4hsan The 5inistry o! $inance (5o$ has agreed to a proposal o! the 0nternational 5onetary $und (05$ to give the Bangladesh Bank (BB the authority to !ire managing directors (5Ds o! the state- owned "anks (,oBs -- "oth commercial and specialised ones -- !ound guilty o! any wrongdoing& But# the ministry still remains rigid on the issue o! authorising the central "ank to dismiss directors# chairmen or a"olish the "oards o! the "anks concerned# highly placed sources in the 5o$ and BB said& The enhanced power would "e delegated to the BB "y amending the e2isting Bank 6ompany 4ct (B64# .))(& The !inal dra!t o! a "ill seeking to amend the said 4ct is almost ready !or su"mission to the 6a"inet Division !or approval& The partial acceptance o! 05$ suggestion has already "een conveyed to the local o!!ice o! the $und# sources said& $inance 5inister 454 5uhith had at least two meetings with %teri 9vintrad;e# 05$ -esident -epresentative in Dhaka# in the current month to sort out di!!erences over amendments to the B64# .))(# particularly on BB and ,oBs# it is learnt& 4 !inance ministry o!!icial said the 05$ local o!!ice has accepted the latest stance o! the government on empowering the BB in line with its suggestion# though partially& He said the BB is yet to "e competent enough to e2ercise a"solute power to regulate state-owned "anks as suggested "y the 05$& 7>e have retreated !rom our earlier position# at least& 4ny a"rupt power trans!er !rom !inance ministry to BB !or regulating the government-owned "anks could prove to "e too much "ecause o! the poor monitoring capacity o! central "ankers#7 a senior !inance ministry o!!icial told the $%& However# top BB o!!icials said much would depend on the position o! 05$1s upcoming mission& The %2tended 6redit $acility (%6$ mission o! the 05$ is scheduled to arrive in Dhaka on <ovem"er .@ ne2t to review the development o! re!orm measures in !inancial sector including the revenue issues& Under the %6$ programme# the multilateral lending agency asked the government to empower the BB to dismiss "ank directors# managing directors and a"olish "oards o! directors o! all ,oBs# i! needed& $% .)&++&.)+. S panel warns C!"s of state banks against rising irregularities The parliamentary standing committee on the !inance ministry yesterday warned state "anks against rising irregularities# which it said are eroding pu"lic con!idence in them& The committee asked the !inance ministry and the Bangladesh Bank to act !ast to "ring discipline to the "anks1 !unctions# said some mem"ers o! the committee a!ter a meeting& 4H5 5osta!a 9amal# chairman o! the committee# presided over the meeting at the Jatiya ,angsad Bha"an# attended "y managing directors o! all eight state-owned "anks& ,9 ,ur 6howdhury# deputy governor o! the central "ank# was also present& The parliamentary watchdog arranged the meeting a!ter gross irregularities were detected in these "anks& Pu"lic con!idence in these "anks was damaged "y the recent Hall-5ark scam# said the committee mem"ers =uoting 9amal as saying& The once little-known te2tile company# Hall-5ark Aroup# alone took away Tk .#?3? crore on !orged documents !rom a ,onali Bank "ranch& 9amal also asked the !inance ministry not to appoint any "ank director on political considerations& BDirectors in the state-owned "anks should "e appointed on the "asis o! merit#C he said& The committee o"served that the "asic structures o! these "anks have 1almost collapsed1 due to corruption& B>e have e2pressed resentment over the per!ormance o! the state-owned "anks# especially in giving and recovering loans#C said Ta*ul 0slam# a mem"er o! the parliamentary committee and the chie! o! a panel that is pro"ing the Hall-5ark scam& 0slam said the committee has asked the BB to ensure accounta"ility o! the o!!icials o! the state "anks& Things cannot go on in the way the state "anks are running at present# said another mem"er o! the committee# adding that !inancial order must "e ensured& B>e1ve "een warned to "e vigilant so that any Hall-5ark-like scam cannot occur in !uture#C said the managing director o! a state "ank# asking not to "e named& He said ,onali Bank and B4,06 Bank !aced most o! the criticism !rom the lawmakers !or their !ailure in running the "anks& ,ome other "anks# including Janata# told the committee that their per!ormance has improved over the years# he said& D, .)&++&.)+. Boards o! state "anks inactive !or ( months #M$ asks govt to appoint directors as per Bangladesh Bank criteria -e*aul 9arim Byron The "oards o! state "anks have remained dys!unctional !or more than three months as the government has "een una"le to appoint directors to the "anks1 highest policymaking panels&'!!icials o! these "anks said they cannot take important decisions# including those !or approving private sector loans and rescheduling loan proposals# in a"sence o! the "oards&$inance ministry o!!icials said the reconstitution o! the "oards is getting delayed as the !inance minister !inds it di!!icult to choose the right people !or the posts a!ter the recent scams and the allegation o! involvement o! their directors in the !rauds&The 0nternational 5onetary $und has also asked the government to appoint directors who meet the 1!it and proper1 criteria o! the central "ank&4n 05$ mission during its recent visit to Dhaka made the suggestion and the government also committed to go "y the recommendation# a !inance ministry o!!icial said&,ince the !irst week o! ,eptem"er# a"out /) posts o! directors in di!!erent government-owned "anks and !inancial institutions have "een vacant& '! the posts# .? are with ,onali# Janata and 4grani "anks&The managing director o! a state "ank said the amount o! de!ault loan may increase much this year in a"sence o! their "oards&He said loan rescheduling is not possi"le without the "oard1s decision and !or loan recovery# rescheduling is necessary&The managing director o! another "ank said they contact the !inance ministry almost every week# and the o!!icials at the ministry assure them that the "oards will "e reconstituted ne2t week "ut it does not happen&The !inance minister has contacted some eligi"le people and o!!ered them directorship in the "oards "ut they have re*ected the proposals# the ministry o!!icials told The Daily ,tar&The o!!icials said the !inance minister has "een talking uno!!icially with the central "ank on whether some o! his choices can "e appointed as directors&They said many o! the vested =uarters are still lo""ying !or the posts o! directors at the state "anks&There have "een allegations that some o! the directors take commission !rom "usinesses as well as individuals in helping them get loans !rom the "anks&4!ter coming to power in .))D# the present government appointed some !ormer leaders o! Ju"o League and 6hhatra League# the youth and student wings o! the ruling 4wami League# as the directors o! the "anks&The state "anks had made some progress as a result o! the implementation o! the >orld Bank1s !inancial sector re!orm programme "ut it was hampered in the recent times due to the inter!erence "y some directors with political a!!iliation&The central "ank also warned the "oards o! the "anks and the !inance minister several times a"out such inter!erence&0n Decem"er .)+)# the central "ank1s "oard also discussed the issue o! inter!erence "y the state "anks1 directors& The "oard e2pressed concern over the matter and decided to convey the concern to the government in writing&Later in early .)++# Bangladesh Bank Aovernor 4tiur -ahman wrote a letter to the !inance minister# sayingE B0n the day-to-day activities o! the "anks vi; loan approval activities# trans!er and promotion# direct inter!erence "y the "oards and incidences o! e2erting in!luence have come to our knowledge&CThe letter also said the issues were very important and needed immediate steps&But no action was taken& Later the !inance minister organised a !ace-to-!ace meeting "etween the BB o!!icials and the directors o! the state "anks where the directors severely criticised the central "ank o!!icials& D, +@&+.&.)+.