The Bangladesh Bank in a new review has revealed a few significant anomalies in credit payment of Union Bank.

It found that the largest part of the confidential business bank’s absolute disbursal had been loaned out to exactly 300 organizations that main exist on paper. Indeed, even the organizations, at times, don’t have exchange licenses.

In the undeniable outcome, the Shariah-based bank is presently pursuing the borrowers and neglecting to understand the credits.

The situation is very like other infamous monetary tricks, including that of Basic Bank, Hallmark, Farmers Bank, and PK Halder.

As indicated by the BB report, the Union Bank has not announced the credits as arranged, however it evidently neglected to take the cash back.

The national bank said a sum of Tk 183.46 billion – – around 95% of the bank’s all out disbursal – merits being characterized.

The bank, against such a setting, has been approached to change the credits inside next December and present an advancement report to the national bank after like clockwork, said Bangladesh Banks representative and its chief Serajul Islam.

The national bank gave a letter in such manner to the confidential bank on 27 April after periods of conversation, added the BB official.

As such a lot of defaulted credits would place the whole monetary area in danger, the national bank, in the letter, has specified a time span until next December to change and regularize the advances in stages.

Nonetheless, the letter requested that the bank announce the advances as defaulted on the off chance that it neglects to regularize those inside the specified period.

An ordinary review of Bangladesh Bank tracked down the inconsistencies in the start of the ongoing year. Afterward, it sat in a few gatherings with the Union Bank and the guidance letter has been given in the accompanying turn of events.

Prior in September last, the national bank found a disparity of Tk 190 million in a vault of Union Bank’s Gulshan branch in the capital. In any case, no managing organizations, including Bangladesh Bank, have made any disciplinary move against the bank over the occurrence for obscure reasons. The national bank later inspected the bank and tracked down additional abnormalities there.

The famous trickster, PK Halder, depended on a comparative plan and opened many paper-based organizations to take out a huge amount of cash from different monetary foundations. Notwithstanding, his organizations were enlisted with the Registrar of Joint Stock Companies and Firms (RJSC).

Yet, the Union Bank borrowers are a stride ahead here as they just have exchange licenses. There is no such thing as the vast majority of them in actuality.

Association Bank MD ABM Mokammel Hoque Chowdhury didn’t answer when Prothom Alo over and again looked for his clarification on the issue over telephone.

Indeed, even he was unable to be reached during a visit to the bank’s base camp on 23 June. This reporter tracked down the extra overseeing chief, Habibur Rahman, at the administrative center. Be that as it may, he left his office carefully despite an inquiry over the issue and didn’t return inside the following couple of hours. Thus, the bank’s assertion couldn’t be gathered.

The discrepancies

How much all out credit dispensed by Union Bank remained at Tk 193.82 billion toward the finish of 2021. Around 95% of the credit, as per the national bank, merits being ordered. In any case, the bank, toward the finish of the earlier year, demonstrated its defaulted advances to be just 3.49 percent of the complete disbursal.

The bank began its excursion a long time back and it has as of late moved to the Shariah-based financial framework. Jatiya Party establishing president Hussain Muhammad Ershad and its previous secretary general Ziauddin Ahmed Bablu were associated with the bank during its origin.

The Bangladesh Bank authorities observed that the credits were taken from exactly 40 branches, including Panthapath, Gulshan. The bank even didn’t keep significant archives against the credits. Now and again, the advances were not endorsed by the higher specialists.

In its letter to the Union Bank MD, the national bank requested to present a credit recuperation progress report like clockwork.

The bank needs to regularize 25% of the advance – Tk 45.75 billion – – by 30 June, 35 percent – – Tk 64.19 billion – – by 30 September, and the leftover 40% – Tk 83.37 billion by 31 December.

Making sense of the issue, the national bank representative said while visiting banks, it is much of the time seen that there is no insurance for the dispensed advance, no presence of the getting organization, and no report of the credit.

In numerous different cases, the credit is utilized in a business other than the referenced one. These advances are at high gamble in spite of being standard and are ordered on material and subjective scales, he added.

How the bank operates

As indicated by its yearly report for 2021, the subsidizing cost of Union Bank is 8.9 percent while the loaning rate is 9%. So a central issue arose about how the bank is creating gain in the wake of paying 8.9 percent premium to contributors.

Regardless of expenditure a huge part of revenue pay as subsidizing cost, the bank revealed a net benefit of Tk 870 million out of 2021, when the figure was Tk 980 million in the earlier year.

In the mean time, the bank got recorded with the capital market and raised Tk 4.28 billion asset through first sale of stock (IPO) shares.

Authorities of the bank said they right now have no credit dispensing objective from the high ups. They are granted with addition and advancement just while they bring an enormous amount of stores. The branch administrators who dispensed the questionable credits were advanced often.

The bank revealed a store of Tk 200.22 billion out of 2021 – Tk 41 billion from various government and independent establishments and Tk 33.85 billion from different banks. Just the Islami Bank Bangladesh Limited (IBBL) has a store of Tk 22.9 billion.

The Union Bank neglected to return the store according to request and is much of the time expanding the cutoff time.

The all out dispensed advance remained at Tk 193.82 billion of every 2021. Around 94% of the sum – Tk 86.92 billion – – was dispensed from Dhaka and Chattogram. Be that as it may, the bank outfitted its administration the nation over and expanded the quantity of branches to 104 in the earlier year.

Its administrator Ahsanul Alam wrote in the yearly report for 2021, “The economy of Bangladesh is dealing with certain issues. The ongoing inflationary tension is a significant issue particularly for the low-pay purchasers. Likewise, high non-performing credits have for some time been a main issue in the financial area.”

Ekushey Padak winning financial specialist teacher Moinul Islam said such a disaster isn’t inconceivable when one individual controls seven banks. As a matter of fact, the public authority has zero desire to reestablish request in this area. The Bangladesh Bank has likewise turned into a foundation of the money service.

He likewise cautioned that there may be a major risk in the area at any point in the near future

By a7pgk

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