Sonali Bank to stand firm against fraud
The beleaguered state-owned commercial bank (SoCB), the Sonali Bank, has rather reluctantly decided to initiate legal actions against the masterminds of the country's worst ever banking fraud, detected by the central bank in May last year.
The bank's board of directors in a meeting held last week, reportedly, asked the management of the bank to file cases against the owners of the Hall-Mark Group.
Despite lots of criticism against the board and the management of the country's largest SoCB, the bank did not feel it necessary to initiate legal actions against the top notches of the Group, including its managing director who was arrested and dumped into the prison soon after the revelation of the forgery involving Sonali Bank's fund worth nearly Tk. 30 billion.
The bank's board of directors decided last week to initiate legal actions only when the bank's legal advisors, reportedly, alerted the bank management to time-bar for filing cases. The lawyers, according to a newspaper report, advised the bank management to file cases with the Artha Rin Adalat (Money Loan Court) and also with courts trying civil and criminal cases.
However, the public perception of the Hall-Mark scam is that the money swindled out of the Sonali Bank would never be recovered because of the 'involvement' of powerful quarters. There could be legal actions on the part of the Anti-corruption Commission (ACC) and the aggrieved Sonali Bank, but the money that has gone out of the bank's kitty is unlikely to be returned or recovered, they feel.
Despite the fact, the chief executive of the Hall-Mark soon after his arrest last year had claimed publicly that his assets were worth 20 times more than the fund he had taken out of Sonali, the management of the bank has so far been able to recover only Tk.4.0 billion.
At one point of time, an idea had prevailed rather strongly in the ministry of finance (MoF) that a mechanism should be found out to make the Hall-Mark going and help the bank recover its fund gradually. Even a proposal was mooted to arrange rescheduling of the overdue loans of the Group. But in the face of strong criticism, the move was abandoned soon after.
It is rather apparent that the possibility of getting bank the fund, swindled out by the Hall-Mark in connivance with a section of dishonest bank officials, is very slim since the fraudsters employed a very well-crafted plan that was based on the use of all kinds of forged documents. More importantly, the Hall-Mark was not required to pledge sufficient collaterals under the method applied by the fraudsters.
However, the outflow of funds from one particular branch, in this case the Rupashi Bangla Hotel branch, was so huge that it is hard to believe that it had escaped the notice of everyone, barring those involved in the scam, in the Sonali Bank. In all probability, some people enjoying authority in the bank were well aware of the swindling. But for reasons that do not require any elaboration they preferred to remain silent.
It is widely believed that, no matter whoever initiates cases against the Hall-Mark, the process of litigation would not get the required pace with a view to protecting some people from public exposure.
Fraudulence involving bank funds is not an uncommon incidence despite widespread use of modern information technology (IT) to stop the same. But the scale of the fraud in the case of Sonali Bank has shocked all concerned, including the top brass in the MoF and the central bank.
The public image of the SoCBs prior to the unearthing of the Hall-Mark scam was not that rosy because of their management problems, continuous erosion in business shares and presence of a sizeable volume of non-performing loans (NPLs). The Hall-Mark incident has only dented the image of the SoCBs very badly.
Now these banks are highly deficient in their capital base. The government as usual has emerged as their saviour. Notwithstanding the fact the SoCBs need higher doses of capital infusion, the government is providing a recapitalization fund of Tk.50 billion, the largest share of the same would be going to the scam-hit Sonali Bank.
The question is: For how long would the government infuse capital into the state-owned banks where even reforms have failed to buoy things up?
The central bank governor is also annoyed at the way the SoCBs are managing their affairs. While addressing the top bankers the other day he said the central bank would not request the government anymore to 'pour water in containers having holes'.
The statement itself testifies the state of affairs with the SoCBs which with their extensive reach across the country, could have made a significant contribution to the growth of the economy.