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Despite repeated instructions from the central bank, state-run Janata Bank is yet to take legal action against AnonTex, one of its major loan frauds, even after two and a half years.
After numerous irregularities were found in loans given to AnonTexGroup during a central bank probe, Bangladesh Bank in 2018 ordered the bank to conduct a functional audit and take legal action against those involved in the scandal.
The AnonTexloan scandal is one of the bank’s major failures responsible for the deterioration in its financial health.
Between 2010 and 2015, Janata Bank disbursed around Tk 3,527.9 crore in loans among 22 companies of AnonTex Group, exceeding 25 per cent of the lender’s capital base which violates the single borrower exposure limit set in the Bank Company Act 1991.
At the end of December last year, total loans held by the group stood at Tk 6,528.60 crore, as per the data from the central bank.
However, the state-run lender did not conduct any functional audit regarding the issue nor made any legal move against AnonTex Group in the last two and a half years.
Talking to The Business Post, a high official of the central bank said, “The bank has not followed the instructions of the Bangladesh Bank despite repeated warnings.
The present management of Janata is not willing to conduct the functional audit as some its own officials were involved with the irregularities, added the BB official, seeking anonymity as he is not authorized to talk with the media.
Despite repeated attempts, The Business Post could not reach Janata Bank Managing Director and CEO Abdus Salam Azad for his comment in this regard.
The chief executive neither answered any calls nor replied to text messages from the correspondent.
Moreover, Abdus Salam Azad also refused to meet the correspondent when the latter paid him a visit at his office on July 6.
Contacted, the bank’sDeputy Managing Director (DMD) Md Jashim Uddin said, “I can’t say anything regarding the AnonTex issue as I was not in the management team at that time.”
Surprisingly enough, the bank management also tried to reschedule the irregular loans of AnonTexGroupinstead of punishing those who were involved in the irregularities.
However, the attempt was revoked following an intervention from the central bank.
In December last year, AnonTex Groupsent a letter to Janata Bank to reschedule their Tk3,742crore non-performing loans (NPLs) by depositing a down payment, which was lower than the required amount set by the central bank.
Later, the bank’s board of directors approached the central bank for its no-objection certificate (NOC) to reschedule the AnonTex loan.
Accordingly, in a letter in January this year, Janata Bank Chairman SM Mahfuzur Rahmanrequested Bangladesh Bank to allow rescheduling of the loans with a lower down payment.
However, the banking regulator refused the rescheduling and even canceled the interest waived facility approved by the Janata Bank for the errant company.
As a result, AnonTexbecame a defaulter for the entire loan amount it took from Janata Bank.
Contacted, AnonTex Group Managing Director Md Younus Badaldeclined to give any comment for the report.
Talking to The Business Post, Policy Research Institute of Bangladesh Executive Director Ahsan H Mansur said, “It needs to be investigated on how Janata Bank approved such a huge sum in loans to a single businessman.”
The economist also said that it was also important to identify and prosecute those who helped AnonTex Group in receiving such a big loan from Janata Bank.
“Otherwise, criminal offences like this will continue to grow further,” he added.
“Nowadays, we see that if there is any irregularity or corruption, there is no tendency to find out the real culprits,” said Mansur, who is also the chairman of private commercial Brac Bank.
He also emphasized that the government needs to play a bigger role to bring good governance inthe banking sector.
However, AnonTexloan scandal is not the only financial woe for the state-run commercial bank.
At the end of March this year, the total amount of default loans at Janata Bank stood at Tk13,570.81 crore, which is 23.77 percent of its outstanding loans.
The state lender made a net loss of Tk5,054 crore last year.
The bank capital shortfall stood at Tk417 crore as of March this year, in contrast to Tk5,475 crore three months ago owing to the regulatory forbearance of the central bank.
