Once Basic Bank, Islami Bank and Janata Bank were known as reliable banks but all three are in a precarious state at the moment.
Basic is trudging along while Janata is plagued by default loan and Islami Bank has lost its heritage.
Former deputy governor of Bangladesh Bank, Khondkar Ibrahim Khaled, has said: “The vulnerable condition of these banks is an ominous sign for the whole sector; the banks are suffering due to the inclusion of vile people in the executive committees.”
Prior to 2009, Basic Bank was deemed a model bank with very little default loan but now it’s in a disastrous condition with default loan of Tk 88.04 billion.
To save the bank from imploding, the government injected Tk 33.90 billion between 2014 and 2017.
Ibrahim Khaled, says: once there was good governance at Basic Bank but the downward trend began with the appointment of Sheikh Abdul Hye Bachchu; if he had been removed when his policies were destroying the bank, its reputation could have been saved.”
Reportedly, with the connivance of former chairman Sheikh Abdul Hye Bachchu, around Tk 50 billion was embezzled from the bank.
Janata Bank was in a solid position in 2011 though now it’s running on borrowed money. The institution has fallen back on all indicators. On one hand, default loan has risen and on the other, operational cost has also seen an increase.
The net loss of the bank in one year has been Tk 60.63 billion, informed a Bangladesh Bank report. As per central bank report, in 2009, the total default loan of the banking sector was Tk 224.81 billion while now, only Janata Bank has a default loan of Tk 214.11 billion.
“The negligence of the government has resulted in such a massive default loan,” said Khondkar Ibrahim Khaled.
The loan has risen since defaulters were not punished; instead they were mollycoddled, he added .
Recently, it was found that the bank created a channel through which several groups Anantex and Crescent expropriated thousands of crores.
When professor of economics of Dhaka University, Dr Abul Barkat, was chairman of Janata, large loans were sanctioned for Crescent and Anantex. He was chairman of the bank from 2009 till 2014.
Once Islami Bank helped other banks but now it’s sunk in crisis. The problem began in 2016 with a change in ownership. Sources say, due to fund crisis, the bank is unable to give loans.
Of the private sector banks, the biggest loan defaulter now is Islami Bank with Tk 69.16 billion.
Previously, the bank was operated by a group aligned to Jamaat but now it’s run by Chattogram based S Alam group.