The finance minister says each bank to go through special audit
Finance Minister AHM Mustafa Kamal on Wednesday vowed to take stern action against dishonest bankers and businessmen.
A special audit will be conducted in each bank to unearth irregularities and identity the actual state of default loans and defaulters, he said.
“This audit will be done through three accounting firms and three audit firms. I shall discuss the issue with Bangladesh Bank Governor Fazle Kabir and Financial Institution Division Secretary Md Asadul Islam,” said Mustafa Kamal.
“Defaulting loan is a crime. Not just for you, for the whole country,” he added.
The finance minister also warned corrupt and dishonest businessmen of consequences, saying illegal activities will not be overlooked.
“We will take strict action against all dishonest and corrupt businessmen of the country,” Kamal said at a business conference.
“Banks and financial institutions cooperating with the corrupt and dishonest businessmen will also be brought before the law and punished accordingly,” he added.
On the planned bank auditing, the finance minister said: “We want to see through the inspection who took loans, who opened the L/Cs (letters of credit), and who are the defaulters.”
He said bankers should be aware of all aspects before sanctioning loans.
If the loan is not fully utilized, it can be a failure. But bankers should identify honest businessmen, and those who are dishonest .
State-owned Rupali Bank organized the “Annual Business Conference 2019” at Krishibid Institute Bangladesh in the capital. The finance minister inaugurated the conference as chief guest.
Rupali Bank Chairman Monzur Hossain presided over the inauguration ceremony. Bangladesh Bank Governor Fazle Kabir, Financial Institution Division Additional Secretary Md Fazlul Haque, and Rupali Bank Managing Director and CEO Md Ataur Rahman Prodhan attended the event. The bank’s directors, senior officials and 587 branch managers were also present.
In his welcome speech, Rupali Bank Managing Director and CEO Ataur Rahman Prodhan said: "We have given maximum importance to provide banking services at grassroots level.”
He said when the current management took over in 2016, the number of loss-making branches was 568. In 2017, the number was reduced to 30, and in 2018, it was only eight.
The CEO appealed to the finance minister to raise the capital of Rupali Bank. In support, Ataur said Rupali’s paid-up capital is now only Tk372 crore, whereas a new bank requires Tk400 crore as paid-up capital to start.
“We are lagging behind our competitors and suffering in international trade due to inadequate capital,” Ataur Rahman Prodhan said.
According to Rupali Bank data, at the end of December 2018, total amount of the bank’s deposits stood at Tk38,955.38 crore, total loans and advance stood at Tk24,749.06 crore, total imports through the bank stood at Tk11,402.15 crore, total exports through the bank stood at Tk2,600.20 crore, total remittance earnings stood at Tk1,717.32 crore, total classified loans stood at Tk4,140.07 crore, total recovery from default loans stood at Tk187.76 crore, and operating profit at the end of 2018 stood at Tk367.59 crore.