Syful Islam

State-owned Agrani Bank Limited's main branch granted Tk 62.85 million in loan to one Fazlur Rahman & Co against 24 decimals of land and other properties shown as collateral. But a central bank investigation team later found no trace of the company office nor it found any establishment of it.

In another case the branch granted Tk 160 million in funded loan and Tk 200 million in non-funded loan to one Roko Enterprise against forged documents on land located in Gazipur. Despite the forgery, within two months the CC (Hypo) was raised to Tk 80 million, letter of credit (LC) loan to Tk 200 million and Loan against Trust Receipts (LTR) to Tk 80 million against the same collateral worth Tk 140 million.

In the following month the customer applied for further enhancement of the LC loan to Tk 350 million and the LTR to Tk 200 million. The branch sent the application to its credit committee within two days of its submission.

These are two examples of Agrani Bank's irregularities in sanctioning bank loans, which finally led to filing of suits against the borrowers to recover the money.

Until August last, the Bank had 6,990 cases remaining pending with different Artha Rin Adalats or money loan courts, involving Tk 37.70 billion, according to statistics available with the bank.

About 214 writ petitions involving Tk 3.71 billion also remain pending with higher courts.

Legal experts think the number of money suits of state-owned banks might have not gone up to this high, had proper guidelines been followed in sanctioning loans.

"Bankers will have to think first whom they are granting loans and if the applicants are eligible or not. Had they cautiously checked the documents of applicants before sanctioning loans, the scenario might not have been this worse," the bank's senior lawyer and legal adviser S A Rahim told the FE.

Mr Rahim, legal adviser of the Bank for over two decades, thinks in many cases of loan approval the bankers are guided by 'something different' rather than professional integrity.

He said there were many examples that authorities granted loans without necessary collateral, against inflated prices of mortgaged properties and on receipt of forged documents as collateral.

"The Hallmark loan scam is one of the many such wrongdoings which are yet to come to light," he said adding a major portion of bank officials were involved in corrupt practices.

Agrani Bank's deputy general manager Md Shahidullah, who deals with legal matters, told the FE Thursday as a routine work they were pursuing quick disposal of pending cases.

He said the major reason behind the buildup of case backlog was the writ petitions filed with higher courts. "If a writ petition lies with the Appellate Division, there is no surety that it will soon be disposed of because of the shortage of benches there."

"There is only one bench in the Appellate Division to dispose of all the writ petitions. So, the cases remain pending for years," Mr Shahidullah added.

He, however, said the number of writ petitions of his bank was now very small. "Out of Tk 3.71 billion stuck against writ petitions, only two cases involve around Tk 1.0 billion."

Mr Shahidullah, however, said now the cases were being disposed of faster than earlier.

News: The Daily Financial Express/Bangladesh/29-Sep-12