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Janata Bank anomalies cause revenue loss of Tk110m

  • Published at 07:29 pm September 9th, 2013
Janata Bank anomalies cause revenue loss of Tk110m

The government lost a revenue of Tk110m at the state-owned Janata Bank because of various irregularities in the years 2010 and 2011, said an audit report made by the Comptroller and Auditor General (CAG).

The irregularities included cash assistance despite export bills unsettled, making less deposit to the public fund from income tax at source on LC commission earnings, payment of income tax on employees’ salaries and allowances from the bank fund without approval of the finance ministry and not collection of Vat from PAD or acceptance commission.

HS Fashion, a client of the bank’s Dilkusha branch, failed in its export business, which created a demand loan of Tk175m from the bank.

According to the report, the client was supposed to pay export bills of Tk11.3m to the Naranyanganj corporate branch of Sonali Bank and settle export bills of Tk3.26m by 20 January 2008. But it didn’t pay and settle those bills. Despite it, the Dilkusha branch of Janata Bank provided cash assistance of nearly Tk18m to HS Fashion.

Due to this forgery by the exporter and branch authorities, the government lost a revenue of Tk18m.

If a client do not settle export bills within two years, he will not be allowed to receive assistance, according to a Bangladesh Bank circular.

But Jananta Bank violated this central bank instruction providing cash assistance to HS Fashion.

The income and expenditure statements of different corporate branches of Janata Bank said the local offices earned a total Tk1.03bn as LC commission.

Of that income, an amount of Tk52m was eligible to be deposited to the government exchequer. But the local offices of the bank deposited Tk34m as income tax, leading the government lose a revenue of another Tk18m.

Similarly, the bank’s Shekh Mujib Road corporate branch of Chittagong earned Tk104m from LC commission, of which, Tk5.2m was eligible to be deposited to the government exchequer as per 5% income tax at source. But the bank deposited Tk4.9m.

The audit report said the bank had paid income tax on staff salaries and allowances of nearly Tk60m from the bank fund without approval of finance ministry during the fiscal year 2010-2011.

Besides, the government lost a revenue of Tk8.2m because of not collecting value added tax from acceptance commission.

Income and Expenditure statements of corporate branches of Janata Bank showed the earnings from PAD commission was Tk44.7m in 2010 and Tk10.3m in 2011.

But during the years they did not collect 15% Vat which stood at Tk8.2m on the total income of Tk55m as per value addition service code 56.00 of the National Board of Revenue.