Bangladesh Krishi Bank in Chattogram has waived Tk48 crore in interests on a loan granted to a local political leader by the name of Mohammad Ali Abbas, in which investigators have found anomalies.
Abbas, a former joint convener of the Chattogram South District branch of BNP and also a former member of Charpatharghata Union of Karnaphuli Police Station, took out Tk85 crore in loans from Chattogram's Agrabad branch of the bank mortgaging land worth only Tk6 crore as collateral.
He introduced himself as a consumer goods trader to the bank and took out this loan in the name of Messrs Abbas Trading. The bank filed a loan default case in 2013 against his company for not repaying the loan on time.
The same year, the Anti-Corruption Commission (ACC) filed a case against him with Kotwali Police Station in Chattogram for money laundering.
However, the bank waived Tk48 crore interest on the loan to Abbas Trading before the two cases filed against the company eight years ago were settled.
A person lodged a complaint with the finance ministry in 2020 alleging that the bank waived the interest, taking undue and unethical benefits. The Finance Intelligence Unit of Bangladesh Bank investigated the allegation and found evidence of irregularities in this connection.
According to the report, Bangladesh Krishi Bank waived interest on Abbas Trading's loan as per the BRPD Circular-5 of Bangladesh Bank. But the Bangladesh Bank's Finance Intelligence Unit report of last March says "there is no scope to consider Abbas Trading as an affected company."
Abu Hena Razi, head of Bangladesh Bank's finance intelligence unit, said, "An investigation was launched into irregularities in Abbas Trading's loans. Since the ACC has filed a case in this regard, they will take action."
Messrs Abbas Trading started business in 2010. On the recommendation of Bangladesh Krishi Bank's Agrabad branch and divisional office, the head office of the bank in 2011 gave a conditional loan of Tk85 crore to Messrs Abbas Trading.
Although the company was supposed to mortgage land worth Tk41.33 crore for loan approval, Abbas fraudulently mortgaged 3.755 acres of land worth only Tk6 crore. He did not even set up an FDR of Tk5 crore, supposed to be kept as auxiliary security.
In 2019, at the time of loan rescheduling, the head office of the bank showed the actual value of the land mortgaged to the bank at only Tk6.14 crore. It is against the terms of the loan.
On 30 June 2019, after Abbas applied for waiver of interest on the loan, a working paper was presented at the 740th meeting of the Board of Directors of the bank under BRPD Circular-5. The Board of Directors waived the total interest of Tk47.90 crore for the company. The board approved the company to pay the remaining dues at 9% interest in 36 quarterly instalments over ten years.
Shahadat Hossain, manager of the Agrabad branch of Bangladesh Krishi Bank, said, "A case was filed against the company for not repaying the money. However, the loan has already been rescheduled."
When asked why action was not taken against the company even though the loan was in violation of conditions, he said, "I have only recently been appointed as manager of the bank and I am not aware of this."
Mohammad Ali Abbas, the proprietor of Messrs Abbas Trading, said, "I have already repaid two instalments after the loan was rescheduled. The rest of the money will be paid as per the rescheduling conditions."
Advocate Mahmudul Haque, public prosecutor of the Anti-Corruption Commission, said, "The bank authorities know how the interest of Tk48 crore was waived. However, the ACC case will continue and the person convicted in the money laundering case must face legal punishment."