Boards of banks, NBFIs colluding economic collapse

A recent media report shows that 14 out of 35 Non-Bank Financial Institutions (NBFIs) were in the red zone in 2022.

This was an increase from 12 in the financial year 2021, according to Bangladesh Bank Stability Report 2022.

One of these NBFIs gave rise to the ‘sultan of swindling’ P K Halder of People’s Leasing and Financial Services Ltd as he embezzled and laundered Tk 102 billion.

Most of the boards of banks and NBFIs are dominated by ruling party cronies, or their sympathisers or their family members.

These unprofessional board members who sneaked into boards cashing in on relaxed regulations of Bangladesh Bank, issue loans to the so-called businessperson who are, in fact, ruling party members in disguise.

These businessmen in disguise take loans giving scanty or no collateral to the banks.

These politicians in the shoes of businesspersons don’t do the business rather they launder the money or deliberately default the loan.

Nepotism and political collusion in the boards have been pushing the banks and NBFIs to the brink of collapse under the nose of the central bank, which has been made into a wing of the Finance Division, clipping its independence.

Media is regularly reporting about the looting of banks, quoting the bank insiders and financial experts.

Such looting of banks and political invasion into the financial sphere, which should have been dominated by bankers and financial institutes under the guidance of BB, have recently driven out foreign investors from the country’s leading commercial financial institute Islami Bank Bangladesh Ltd.

According to financial experts and economists, financial institutes have become highly vulnerable due to unthinkable looting of these institutes.

Risky bank loans stood at Tk 377,922 crore at the end of last financial year, exposing the health of the country’s economy.

The economic situation in banks is as follows: In the good old days looters used to go to houses and rob people of money but now people are going to looters’ destinations (banks and NBFIs) to entrust their money in the name of depositing.