Bank officials collude in granting loans against fake documents

AS media report Bangladesh Bank instructed all commercial banks, particularly the state-owned banks recently not to provide ample loans to any party only on the basis that they are not defaulters. From now it will be mandatory for the banks to evaluate carefully land documents, employees number, ledger, value of mortgaged land before sanctioning loan against land as security to such loans. The central bank has laid importance for extra care to minimize the risk of fraud in misusing land as collateral against loans.

As we see the initiative has come too late but nonetheless extra care has been demanded from commercial banks as the use of fake land documents for loans has become widespread to cheat banks under the influence of political quarters and powerful people closer to the government. It is no secret that business houses and individuals are robbing the banks and financial institutions taking loans for business projects. Most projects are fake and non-existent as it appears while borrowers have used fake land documents and the possibility of such loan recovery now stands slim. This is how Hall-Mark group and other big borrowers laundered Sonali Bank and some other banks. Since the land documents are mostly fake; loan recovery almost stands impossible. BASIC Bank is also facing similar bitter experience as many other such banks and utmost care and vigilance is therefore important to save banks from predators’ hands.

Since there is no clear guideline how a bank should keep collateral, borrowers exploited the vacuum and bought the favour of senior bank officials to grant them huge loans. From Chief Executive Officer of the banks to advisers and senior managers, granting loans to their favourite parties was an otherwise brisk business. The ruling party cadres have taken control of most government owned banks and financial institutions as new recruit and their accountability appears nowhere.

The central bank’s directive has come at no other time and we believe it will work as reminder to everybody in the banking and financial sector not to step into any trap of fraud land documents as collateral against bank loans. It is sad Sonali Bank and almost all other state-owned banks are now living on regular recapitalization of their capital. A large part of their defaulted loans remained stuck against fake land documents.

Corrupt bank officials are helping the looters by knowingly sanctioning loans against fake documents of land. Sometimes other peoples’ lands are shown against loans creating problems for the innocent people. Corruption among bank officials goes scot-free, because banks are anxious to protect dishonest officials. It is easy to blame the loan takers as defaulters. The banks also try to hide the truth. Losing money from banks is considered normal.