Published in Asian Age on Tuesday, 20 March 2018
Crooks grab loans without mortgage!
P R Biswas
Allegations show that most of the banks do not show much eagerness to provide loans to honest and young entrepreneurs while enormous figures of bank loans are being gobbled up by influential borrowers, banking sources have informed.
A lot of women, promising and young entrepreneurs are being deprived of mortgage-free bank loans in this way reportedly. On the other hand, allegedly people who are able to exercise political influence get hold of such loans which is a clear violation of banking principles. Financial sources have mentioned that authenticity of this allegation can be justified if the profiles of the top twenty five loan borrowers are properly examined.
A circular issued by Bangladesh Bank on 2nd April 2017 conferred directives on bank loans without security deposit and mortgage for cottage industry, small and medium entrepreneurs but those guidelines from the central bank are not being followed at all, sources related to different banks have stated.
Besides, most of the common employees in banks are totally helpless in such cases because of heavy political pressure and persuasion by top officials from banking and financial hierarchy, sources associated with banking authorities have cited.
As a result underprivileged business entrepreneurs are allegedly not getting adequate financial aid from banks while powerful and well-off big shots are taking away larger amounts of money from state-owned and private banks under cover of bank loans which are being defaulted in most of the cases.
Having faced hurdles from banks, new entrepreneurs, women and farmers are borrowing money from unofficial moneylenders reportedly. Financial experts have referred to these circumstances as hazardous signs for the country’s economy.
According to widespread media coverage, monetary mishaps like bad debts, classified loans, defaulted credits, liquidity crisis and some more ailments have got hold of the country’s banking sector like an epidemic which are being regarded as immense obstructions for national development, economists have warned.
Statistics from the central bank shows that 19 thousand 26 crore taka loans without deposit or mortgage was distributed by commercial banks till December last year. From this amount of disbursed loans 17 thousand 992 crore taka was paid to men while 1 thousand 34 crore taka was paid to women reportedly.
Economists have stressed that small and medium entrepreneurs play significant roles for advancing national economy and generating employment for lots of people. Therefore, analysts have urged the government to take special care of young entrepreneurs to facilitate their business by making bank loans obtainable to them in easier ways.
Ordinary citizens including farmers and fresh entrepreneurs allegedly have to face a lot of harassment and noncooperation from bankers when they apply for loans. Sources from grassroots have identified that a great number of insolvent farmers are going through exasperating hardships as they cannot avail bank loans on convenient terms and conditions.
A number of officials from Bangladesh Bank have said to media on condition of anonymity that most of the banks are now suffering from panic due to the loan scams like the mischief committed by Hallmark, Bismillah Group and Basic Bank as a result of which commercial banks do not feel safe to approve loans without mortgages.
Under these circumstances esteemed citizens and renowned economists have suggested the authorities concerned to simplify loan disbursement process for women, young entrepreneurs and farmers for the country’s economic betterment.
Eminent scholars have also condemned Finance Minister AMA Muhith and Bangladesh Bank’s Governor Fazle Kabir for their failure to keep banks free of political influence. Moreover, economists have urged bankers to come up with a cooperative and benevolent approach to assist transparent entrepreneurs including women in financial terms so that they can flourish with their business efforts.
Dr. Fahmida Khatun, Executive Director, Center for Policy Dialogue (CPD), said to The Asian Age, “It is being reflected that most of the banks are not complying with Bangladesh Bank’s circular about flexible loans for women and young entrepreneurs. Bangladesh Bank’s surveillance over the state-owned and private banks regarding this issue should be further widened.”
Bangladesh Bank’s former deputy governor Dr. Khondaker Ibrahim Khaled told The Asian Age, “Regulatory authorities including the central bank should investigate for what reasons banking irregularities with loan disbursement are taking place. Banking system should be all the time very helpful to women and young entrepreneurs.”
Former adviser to caretaker government Dr. Hossain Zillur Rahman said to The Asian Age, “Small and medium entrepreneurs are very essential for Bangladesh’s economic progress. Therefore, loan distribution to these entrepreneurs should be made easy. The government should keep up a firm stance to resist political interference in such cases.”
On the other hand, Anis A Khan, Managing Director of Mutual Trust Bank Limited told The Asian Age, “All banks are under obligations to cooperate with women and fresh entrepreneurs. These entrepreneurs are highly valuable for the country’s progress.”