CJ says court can’t turn blind eye to ailing banking system

Chief Justice Syed Mahmud Hossain expressed concern today over the poor health of the country's banking sector, and said the Supreme Court cannot turn a blind eye to it.

"The country's public and private banks remain completely beyond control. We cannot sit idle. We will ensure accountability of every bank," observed the chief justice.

The court also said the people responsible will not be spared because the condition of the banks is deteriorating day by day. The government has been injecting funds every year to help them survive.

According to Attorney General Mahbubey Alam, Syed Mahmud made these observation during the hearing on an appeal against a High Court order to freeze the bank accounts of the directors of International Leasing and Financial Services that allegedly embezzled Tk3,500 crore of investors' money.

The latest data from Bangladesh Bank reveals that the banking sector now has defaulted loans of around Tk94,500 crore. And about Tk50,000 crore more loans were rescheduled in 2019 alone.

In the last 10 years, over Tk22,500 crore was plundered from the banking sector through major scams, irregularities and heists, according to a report of the Centre for Policy Dialogue, a private research firm.

The money is equivalent to more than two-thirds of the cost of building the Padma Multipurpose Bridge, it said.

At a programme in Dhaka on February 6 last, even Finance Minister AHM Mustafa Kamal expressed concern about the banking sector, and said the banks are not in good health.

On Sunday, the Appellate Division summoned Bangladesh Bank's former deputy director Khondokar Ibrahim Khaled and any central bank official not below the rank of executive director, who has knowledge about the current banking conditions, to appear on February 25.

The court will hear a brief about the current situation of the banking system from the central bank official, according to Attorney General Mahbubey Alam.

The court may issue directives that day to address the poor condition of banks, he added.

Advocate Ahsanul Karim and Advocate Khairul Alam Chowdhury represented International Leasing while Attorney General Mahbubey Alam and Additional Attorney General Murad Reza stood for the state at the hearing on Sunday.

Mahbubey Alam said the Supreme Court asked the state to provide information on International Leasing's Director Prashanta Kumar Haldar. "We said a deputy governor of Bangladesh Bank helped him flee the country. The court expressed concern about it."

In 2012, depositors applied to International Leasing to withdraw their money from the company, but the company told them that they could not do so.

Then, depositors turned to the High Court in December that year to seek a declaration about the company's bankruptcy.

On January 12 this year, the International Leasing wrote to the High Court to say that they will not be able to repay all the dues at one time, but they would return investors' money as soon as possible.

On January 21, the court appointed Bangladesh Bank's former governor Ibrahim Khaled as an independent director and chairman to run International Leasing. That same day, the court heard a case filed by seven investors to get their money back from the company.

Also that same day, the court ordered the government to freeze the bank accounts and confiscate the passports of 20 people, including Prashanta Haldar and his four relatives.

The court further asked Ibrahim Khaled to provide information about the assets of these 20 people by February 20.

On February 10, two directors of International Leasing, Basudev Banerjee and Papiya Banerjee, appealed against the High Court order. Yesterday, the Appellate Division bench heard the appeal.

International Leasing's lawyers informed the court that Syed Abed Hasan is now the company's managing director (in charge) and chief financial officer of the company.