In the 15 and a half years of the Awami League government, there has been large scale irregularities, corruption, loan scam and abuse of power in the banking sector. The regulatory body, the Central Bank, the higher authorities of the banks concerned, and even the directors of government banks were responsible to allow plundering in the banking sector by a few people and coterie.
The income of the banks has decreased by a record amount due to defaulted loans and concessions for political considerations.
At the same time, the capital deficit and provision deficit have increased. The liquidity crisis has also mounted. Gradually the banking sector has become weak. Due to the weakness of the banking sector, the national economy has also been affected. As a result of the liquidity crisis, the supply of domestic credit has decreased.
A few business houses and businessmen with political links smuggled the money earned through bank loans and credit out of the country. As a result, the banking sector has been weakened. This bad reputation also spread to the international arena.
Foreign banks expressed reluctance to accept LCs from the banks. This forced them to issue LCs with guarantees through third parties. As a result, the cost of foreign trade increased. The burden of which fell on the shoulders of the consumer.
The most powerful bank in the government sector was Basic Bank. It has been greatly weakened by loan scams.
Earlier, the chairman of its board was the Industries Secretary. Some other secretaries and additional secretary-level officials were members. As a result, the bank was running quite well. Its defaulted loans were less than 3 per cent.
It gave a large dividend to the government every year. After the Awami League came to power, Abdul Hai Bachchu, a close associate of the party, was made its chairman.
He broke the bank's administration system. He kept giving loans to whoever he wanted. He made the board a blind horse. Taking this opportunity, he took sole authority over the bank and started taking loans from whoever he wanted. There were no rules and regulations.
The governor of the central bank was Dr Atiur Rahman. When he was informed about the issues of BASIC Bank, he also did not take a strong stand against the looting. In the three years from 2010 to 2013, about Tk 5.5 billion of the bank went into the hands of the looters.
Since this money was not recovered, the bank's defaulted loans are increasing. March 2025, the defaulted loans increased to 70 per cent. Due to defaulted loans, the capital deficit has increased. The liquidity crisis has become apparent.
As a result, the once strong bank has now become terribly weak. It is making loss instead of profits. BASIC Bank is now one of the weakest banks in the public sector. Due to financial crisis, the employees are not getting their salaries and allowances properly.
Janata Bank was at the top of the list of public sector commercial banks. The institution has been weakened by looting over time.
Loan scam in this bank started through the Bismillah Group. Behind this was a member of parliament from the ruling party. He first took a loan from Janata Bank by using political influence.
Later, he took a total of Tk 1,200 crore loans from 6 other banks and smuggled it all abroad. Then, under government influence, Crescent Group committed a loan fraud of Tk 5,000 crore and Anon Tex Group committed a loan fraud of Tk 7,000 crore. Beximco Group, using influence, took a loan of Tk 2,700 crore from its local office alone.
However, a branch or any bank cannot give such a large loan to a customer. No approval was taken from the central bank for giving these loans. The central bank repeatedly asked Janata Bank for information about the loans of Beximco Group. Of that loan, Tk 2,300 crore is now in default.
In addition, the bank bought defaulted loans from various banks in cash under political pressure and gave them new loans.
Those loans have now become defaulted again. In total, the bank's defaulted loans have increased to 75 per cent. In early 2009, defaulted loans were below 5 per cent. The bank is now suffering from provision and capital shortages. Its lending capacity has decreased. It is making loss every year.
In the public sector, Agrani Bank, defaulted loans were less than 20 per cent in early 2009. Now it has increased to more than 41 per cent.
The Hallmark Group scandal began in 2010 in the public sector Sonali Bank. The group took loans of Tk 4,000 crore from 27 banks, including Sonali Bank. An adviser to the former prime minister supported the group. At that time, this was the biggest loan scandal. Due to this, Sonali Bank has become weak. It has now been able to overcome this pressure to some extent. After that, no major loans have been given from the bank. That is why the bank's defaulted loans are now limited to 21 per cent.
The government-owned Rupali Bank has become vulnerable as the irregularities have decreased. However, it still has large loans to several groups, including Beximco Group. As a result, defaulted loans have increased to 36 per cent.
The most powerful Islamic Bank in the private sector was taken over by politically influential S. Alam Group. Tk 225,000 crore has been taken out of this bank. The defaulted loans have now increased to 28 per cent. Earlier, the defaulted loans were less than 9 per cent.
The National Bank was taken over and looted by the Sikder Group.
In the Bank the defaulted loans have now increased to 65 per cent. The capital shortage is also evident.
First Security Bank was under the control of the S Alam Group. They looted it too, taking advantage of the laxity in the enforcement of the Central Bank's laws.
All the looted loans are becoming defaulters. That is why the defaulted loans have now increased to 37 per cent.
Salman F Rahman of Beximco Group single-handedly used IFIC Bank. Due to which the defaulted loans of the bank are now more than 58 per cent.
Due to looting, the new generation banks are burdened with defaulted loans. Of this, 55 per cent is in Global Islami Bank. Padma Bank under former Home Minister Mohiuddin Khan Alamgir and later by Nafiz Sharafat made massive irregularities and plundering.
Due to which the defaulted loans have now increased to 87 per cent. Due to looting in Social Islami Bank, the defaulted loans have increased to 37 per cent.
In Union Bank, the defaulted loans have increased to 90 per cent. In United Commercial Bank, under former Land Minister Saifuzzaman Chowdhury Javed and his close associates, made the bank weak. Nearly Tk 2,000 crore has been looted. The defaulted loans in the banks are now 15 per cent.
