Incidents in which criminals empty banks' vaults using underground tunnels or armed bandits loot cash by keeping bank officials and customers hostages at gunpoint rarely take place these days. Digital gadgets and better security measures are seen as major deterrents.
But the plunder of bank funds has not stopped. Rather, it has been taking place on an unprecedented scale. Some people in the garb of borrowers have been siphoning off funds worth billions from banks at ease and leading a cosy and affluent life. Some even dictate terms in society.
A few incidents of plundering banks' funds have been unearthed. Many more are still unknown. The popular perception is that some influential people, including businesses, use their political connections to manage large loans from banks. And they default on their repayments, deliberately. Loan scams one after another have hit news headlines. There are also cases in which bank officials have embezzled funds. At the peak of such incidents was the looting of the People's Leasing fund worth over Tk 30 billion by its managing director PK Halder, who is now in police custody in West Bengal.
Even the country's higher court made a strong observation about the state of things in the banking sector last Tuesday. While hearing a bail plea filed by four Islami Bank officials accused of embezzling a petty amount, a two-judge High Court bench observed that most 'deadly' offences have been taking place in the banking sector. "There are many big offences in this sector. These are paralyzing the country ", the bench maintained.
One can cite many developments in the recent past that are unsavoury and detrimental to the normal growth of the banking sector. Powerful people involved in many scams got away easily. Relevant agencies, despite having all the intentions to pursue the offenders, could do nothing for understandable reasons.
One cannot but feel pity for the regulator concerned. Most of the times, it proves itself to be a toothless tiger. Banks have also learnt to live in such an environment. Overall, things have gone too far. Bringing back discipline might prove pretty difficult for anyone seeking to do so.
One particular incident will be enough to describe the rot. According to a report published on Thursday in the largest-circulated vernacular daily, the central bank issued a directive on Tuesday asking the state-owned Janata Bank to stop foreign loan transactions of its Corporate Branch, Local Office and Sadharan Bima Bhavan Corporate Branch in Chattogram for alleged irregularities and corruption.
The central bank, however, had to rescind its order within 24 hours in the face of intense pressure coming from very powerful business people, including politically influential elements, owners of private banks and businesses, who are proven big bank-loan defaulters. The ratio of classified loans in these three Janata branches varies between 19 per cent and 30 per cent, much higher than the average ratio. While suspending foreign loan transactions, the central bank cited particular examples of irregularities.
Until recently, Janata was the best performing state-owned bank, floating in liquidity of a healthy nature. It used to lend to other banks for a good profit. Now it borrows from others every day to keep its business going. Who brings this bank to such a state? It will not be difficult to find them. But, at the moment, none seems to be interested in taking up the job. So, there could be more scams like that of Hall-Mark or BASIC Bank or People's Leasing or Bismillah Group. The sheer use of power and influence has kept those buried.