THE banking sector appears plagued with malpractices, with an abnormal increase in shady and suspicious loans and the amount defaulted loans continuing to increase. Both state-owned and private banks are reported to be suffering from such malpractices in the absence of proper central bank oversight and regulation. The disbursement of Tk 6,835.5 crore in loans by Islami Bank Bangladesh Ltd, one of the reputed private banks, has recently caused some concern. The bank has provided loans for eight companies, some reported to exist only on paper, between April 25 and November 17, as a Bangladesh Bank report shows. In November, the bank sanctioned Tk 2,460 crore in loans in 17 days, which appears unusual by any standard. The bank provided, as New Age reported on November 25, a Tk 1,693 crore loan for Shimul Enterprise, Tk 1,224 crore for Naba Agro Trade, Tk 1,090 crore for Anwer Trade International, Tk 1,011 crore for Nabil Grains, Tk 981 crore for Marts Business, Tk 640 crore for Naba Firm, Tk 545 crore for International Product Palace and Tk 61 crore for Nabil Feed Mills. The bank earlier extended a large amount of suspicious loans to the S Alam Group.
Economists fear that most of the loans are shady and approved on political considerations and much of the money may have already been smuggled out. Since the restructuring of the Islami Bank by the…
