Published in New Age on Tuesday, 23 June 2015.
BASIC seeks fresh fund
Shakhawat Hossain
The scam-hit Bangladesh Small Industries and Commerce Bank Limited has sought around Tk 2,000 crore within a week after receiving Tk 400 crore from the public coffers early this month.
The finance division, however, expressed reluctance to inject fresh fund into the bank in the remaining period of the outgoing fiscal stating that there was no improvement in the performance of the state-owned entity.
Besides, budgetary allocation kept aside for investment in the state-owned entities in 2014-15 has been exhausted.
A senior official said they were under serious pressure from BASIC management to release the fund in the fiscal year that would end next week.
He feared that the finance division might bow down to the pressure as the ruling party high-ups seemed lenient with the errant bank.
Before the latest disbursement, Tk 750 crore was given to the once profit making bank late last year.
Bank and financial institution division secretary M Aslam Alam said they had sought the fresh fund from the finance division on behalf of the BASIC.
He said the bank was in need of the fund to overcome its liquidity crisis.
Without improving liquidity position, BASIC could not maintain links with the overseas banks for trade and commerce, he said.
The government has proposed Tk 5,000 crore for recapitalising the state-owned banks in the new fiscal year.
But the BASIC insisted that the fund be released in the outgoing fiscal to overcome the aftereffects of the loan scams quickly.
The state of BASIC Bank remained critical after loans totaling Tk 4,236 crore were extended to 335 little-known clients, most of them defaulters and untraceable. Former chairman Sheikh Abdul Hye was forced to step down following allegations that he was at the centre of the scam.
But the government has not yet taken any move to bring him to book despite demand by the parliamentary standing committee on finance ministry.
The Centre for Policy Dialogue censured the government for recapitalising the state-run banks saying that the taxpayers’ money was being wasted on recapitalisation. Its officials noted that the state-owned banks were making up for losses caused by malpractice with budgetary support from the government.