Default loan culture institutionalised

It is not without reason that the finance minister disclosed the names of the top 100 loan defaulters in parliament. When we look at the figure defaulted upon, we are talking about more than Tk 1 lakh crore siphoned off the state-owned banks which has basically ruined the discipline in the financial sector.

We have been highlighting the issue of parties treating the banks as a free ATM withdrawal system and the total lack of accountability of many of the public banks' top management. We have had several high publicity loan scams involving groups of companies with very dubious records and those cases have never been appropriately dealt with. We have been promised that boards will be reconstituted and basic banking discipline will be restored to tackle the issue of lack of oversight of management in these institutions, yet nothing ever happened.

This paper has over the years touched upon the need to stop putting people with political connections on the board of banks, a sentiment widely supported by experts and veteran bankers and, here too, we find an utter lack of action against nonpayers and selective policy of loan rescheduling of defaulters with clout and political link have contributed to the current sorrowful state of the public banks. The government has to go further than merely making public the names of bank defaulters. The time has come for the setting up of a separate commission to deal with the problem and prosecute those who keep bleeding state coffers dry year after year with impunity.