Tackling Scams
Muhith plans to redesign banking, financial policies
Finance minister AMA Muhith, in the face of mounting pressures to cleanse the tainted state-controlled banks, might seek to redesign policies to better govern the poorly-run financial system. The minister, apparently perturbed by a number of infamous loan scams, the latest being the banking fraud of around Tk 3,500 crore in the state-owned BASIC bank, asked senior officers of his ministry to come up with concrete suggestions to reshape the entire policies governing banking and other financial business.
Muhith might also seek to curtail the powers of the boards of directors of the state-controlled banks and change the responsibilities of top bankers as well as those in the lower tier of bank management.
In separate official notices, signed by the finance minister himself on June 15, all four division secretaries under his ministry were asked to bring their officials from joint secretaries to additional secretaries for a crucial meeting he desired to be held on Sunday to bring about changes in the scam battered banking sector.
‘The meeting will discuss scams in the financial sector, and actions or observations of financial institutions concerned on such financial irregularities,’ reads the notice.
‘It is to be planned on how to revise the powers of the boards for banks and financial institutions along with responsibilities of branch managers of banks.’
Senior officials at the finance ministry said the latest opinion of Muhith came after Bangladesh Bank recently recommended dissolving the boards of scam-hit BASIC bank, once considered to be one of the best-run public sector banks, as the central bank’s investigation found members of the board of directors of the bank were closely involved with the loan scam of Tk 3,500 crore.
However, no action has so far been taken by the finance ministry in line with the BB’s recommendation, raising questions on the very intension of the government, as far as taking action against its own people on the banks’ boards.
A senior finance official said Muhith is seriously contemplating to cut the powers of bank boards.
Officials said the finance ministry came under the scanner of both BB and International Monetary Fund for its apparent negligence in taking action against the politically appointed directors of the boards of directors of the state-owned banks.
Banking scams such as BASIC Bank’s Tk 3,500 crore, Hallmark’s about Tk 3,600 crore from Sonali Bank and Tk 1200 crore loan irregularities of little known Bismillah group from a number of state-owned banks tainted the entire banking sector, according to observers.
‘We are undone as the bank directors are chosen and appointed by the government,’ a high official at the finance ministry told New Age.
Muhith in his official notice also said reforms are badly needed to streamline the public procurement, budget implementation and development project approval.
To make the things happen, the finance minister said existing regulations on financial authorities for public procurement and budget implementation, along with other crucial aspects relating to project approvals, must undergo changes.
-With New Age input
