Janata Bank caught between a rock and a hard place

Golam Mowla
Published : 04:00, Oct 09, 2018 | Updated : 17:29, Oct 09, 2018

Janata Bank Limited.State owned Janata Bank is beleaguered because it gave excess privileges to two groups – Crescent Group and Annon Tex Group. Due to loan scandal of Crescent, the foreign trade licences of Janata bank’s Imamganj and Mohammadpur braches have been revoked by Bangladesh bank.
Stoppage of foreign trade in these two banks have plunged the whole institution in a state of crisis; reportedly, the bank is forced to en-cash capital to carry out daily operations.
Meanwhile, two directors of loan scandal hit Crescent have been removed by the government.
Bank officials say that both Crescent and Anon Tex group took massive loans from Jananta Bank, which have become delinquent. Anon Tex has asked more money from the bank.
Anon Tex owes Janata Tk. 5.5 thousand crore. Bangladesh Bank has already ordered Tk 2600 crore to be listed as default loan.
Crescent Group’s Tk. 3500 crore has already been listed as default loan. To recover the money, Janata Bank has auctioned assets belonging to Crescent’s owners, M A Kader and his brother, Abdul Aziz, also the owner of Jaaz Multimedia.
Janata Bank’s MD, Abdus Salam, said: “we tried to recover the money through several ways and they also promised to pay back but could not.”
Consequently, we were forced to place their mortgage assets for auction, he added.
According to Bangladesh Bank report, institutions under Crescent exported leather products to Hong Kong and Thailand but the proceeds from the exports are not coming back to Bangladesh.
Janata Bank bought the export bills and gave money to the group.
Meanwhile, Janata Bank is faced with liquidity crisis and saw its deposit fall by Tk. 2612 crore in the last two months. On 26 August last, the bank loaned Tk. 2136 crore while default loans stood at Tk. 9879 crore till last June. Capital deficit of Janata Bank is Tk. 2195 crore.
Former deputy governor of Bangladesh Bank, Ibrahim Khaled, says: “Janata was one of the reliable banks but it’s now mired in corruption.”
This has happened due to lack of monitoring, he added.