STATE-OWNED BANKS: Writs block recovery of Tk 45,135cr loans [ Tritiyo Matra News ]

STATE-OWNED BANKS: Writs block recovery of Tk 45,135cr loans

Local July 27, 2015

Recovery of credit to the tune of Tk 45,135 crore by state-owned banks remained blocked for decades due to errant borrowers’ writ petitions.
According to the information revealed at a meeting of the Banks and Financial Institutions Division Sunday 4,250 writ petitions filed by the errant borrowers blocked the recovery by state-owned Sonali Bank, Agrani Bank, Janata Bank and Rupali Bank.
The meeting chaired by BFID secretary M Aslam Alam discussed the efforts of the state owned banks to recover the outstanding loans through legal means.
Bank officials informed the meeting that they could make no headway in recovering the loans over the decades.
Since 1972, over 35,000 law suits were filed in the Artha Rin Adalat, they said.
In most of the cases, the banks won the lawsuits many of which were stayed by the High Court.
According to Bangladesh Bank 21,029 loan recovery cases awaited court decision as of late 2010.
Aslam said after the meeting that most of the High Court verdicts went against the banks because of inefficiency of the state’s law officers.
He said that a proposal for the creation of a separate High Court bench for the speedy disposal of the pending cases awaits a decision.
Officials attending the meeting said that six High Court benches dealing with financial matters attached greater importance to tax
related cases.
Experts said that inept handling of legal issues once again exposed dismal state of the government owned banks.
Centre for policy dialogue executive director Mustafizur Rahman said bogged down by a series of loans scams in recent years the SOBs were unable to pay due attention to recovery of outstanding loans .
Total default loans exceeded TK 54, 657 crore finance minister AMA Muhith informed Parliament on June 27.
The state-owned Agrani Bank, Janata Bank, Rupali Bank and Sonali Bank were yet to go to courts for the recovery of another accumulated bad loans to the tune of Tk 22,654 crore, he said.
He said 56.67 per cent of lending of scam-hit state-owned BASIC Bank became default loans.
Former Bangladesh Bank governor Saleh Uddin said the country’s banking sector was gradually sinking under the present government.
In his budget speech, Muhith announced a commission would be appointed to streamline the banking sector.
The meeting of banks and financial institutions division identified monitoring lapses as the main reason for the failure of the SOBs to get the High Court stays vacated.
Officials said that BFID would take up the issue the ministry of law for expeditious handling of the cases and changing the lawyers if needed.