Finance minister blames bankers for default loans and entrepreneurs' failure

“The way they approve the loans, the borrowers are destined to fail to become defaulters,” he alleged.

He made the allegation at a workshop on the current state of the public sector banks on Saturday. 

Muhith said, “Bankers try to make entrepreneurs default from the day they take loans. The bankers do it deliberately to control the entrepreneurs.” 

“They give loans to projects with so many strings attached so that the entrepreneurs can never succeed.”

“You may feel hurt (after hearing this). But in reality, this is fact,” he added.

The default loans in Bangladesh totalled around Tk 781.5 billion until June 30 this year, including Tk 401 billion at the state-owned banks, according to the government statistics.

The Bank and Financial Institutions Division organised the workshop at CIRDAP Auditorium.

The problems in the state-owned Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, BASIC Bank, and Bangladesh Development Bank, and the possible ways to resolve those were discussed in the workshop.

Muhammad Abdur Razzaque, the president of the parliamentary standing committee on finance ministry, admitted the government’s failure in charging former BASIC Bank chairman Abdul Hye Bachchu in a Tk 29 billion loan scam.

“He gave the loans to such people that couldn’t be traced. Neither the government nor the Anti-Corruption Commission could do anything. He didn’t respond to the summons by the parliamentary committee.

“This is our failure,” he said.

Bank and Financial Institutions Division Secretary Md Eunusur Rahman said in the keynote paper that the total Tk 781.5 billion default loans until June 30 were 10 percent of loans disbursed by the banks.

The rate of default loans at state-owned banks was higher – 27 percent.

Rahman said the top 20 loan defaulters of every bank contribute to a huge portion of the total default loans.

In case of Janata Bank, 49 percent of the default loans went to the top 20 defaulters’ pockets. The amount is 51 percent at Rupali Bank, and 32.4 percent at Sonali Bank.

“This is alarming,” said Secretary Rahman.

State Minister for Finance MA Mannan, Bangladesh Bank Governor Fazle Kabir, Finance Secretary Hedayetullah Al Mamun and top executives of the state-owned banks were also present.