Stop bailing out state-owned banks: House panel calls govt

Emran Hossain Shaikh
Published : 21:07, Jul 12, 2018 | Updated : 21:08, Jul 12, 2018

A general view of capital Dhaka`s financial district Motijheel.A parliamentary panel has urged the government to stop injecting funds to state-owned banks in capital-deficit.
The recommendations along with 22 other suggestions came from a sub-committee of the Parliament’s Committee on Estimates.
The three-strong subcommittee headed by Cumilla-3 MP Yousuf Abdullah Harun was formed in November last year. The other members are Dhaka-10 MP Sheikh Fazle Nur Tapash and reserved women MP Wasiqa Aysha Khan.
The panel filed its report on Thursday in a meeting of Committee on Estimates.
“The recommendations will be forwarded to the ministry and the Bangladesh Bank, who will take necessary steps,” MP Abdur Razzak, who sits on the Committee on Estimates, told Bangla Tribune.
He said that the subcommittee’s recommendations include the government stopping to inject funds into state-owned banks to bridge capital-deficit.
According to Parliament Secretariat sources, the subcommittee found losses, stemming from corruption and irregularities, were the reason behind the capital deficit. The government should weigh inevitable cases before providing re-capitalisation facilities to state-owned banks.
The panel recommended expediting lawsuits over default loans.
It also suggested initiating criminal procedures against clients of state-owned Agrani and BASIC banks, who have defaulted LCs (letter of credit), required for foreign trade.
The report recommends legal actions against BASIC Bank clients, who took loans on forged documents.