Ten banks in trouble, ten business groups under pressure

Severe Crisis in Banking Sector and Industrial Groups

1. Banks in Crisis:

   • Ten banks in the country are grappling with a severe crisis caused by collusion among bank directors, top executives, nepotism, corruption, politically influenced decisions, and media campaigns.
   • These factors have enabled large-scale embezzlement, with Tk 2.34 trillion in loans disbursed to 760 directors, much of which remains unpaid.
   • Non-performing loans (NPLs) in the banking sector have risen to Tk 2.85 trillion, with Tk 30 billion injected into struggling banks to keep them afloat.

2. Targeting Industrial Groups:

   • The top 10 industrial groups are under pressure for loan recovery.
   • Recovery efforts prioritize rapid enforcement over strategies to sustain production, investment, and employment, putting these groups at risk.

3. Central Bank Intervention:

   • The central bank has temporarily supported struggling banks by borrowing from stable ones.
   • Liquidity support of Tk 22.5 billion (printed money) and Tk 7.35 billion in loans have been provided, ensuring survival for a limited period.

4. Root Causes of the Crisis:

   • Anonymous loans issued through irregularities.
   • Family dominance in loan approvals.
   • Media campaigns targeting banks and industries.
   • Misuse of loan funds, with some laundered abroad.
   • Politically driven loan approvals and mismanagement.
   • Loan rescheduling for up to 29 years with minimal payments.
   • Mislabeling banks as "bankrupt" without effective remedial actions.

5. Impact on Industrial Groups:

   • Recovery measures like receivership and account freezes are destabilizing industries.
   • For instance, the Beximco Group's receivership resulted in 18 shutdowns and 50,000 job losses.
   • Similar actions could disrupt other major industrial groups, leading to protests and further economic harm.

6. Accusations of Media Trials:

   • Media outlets are accused of targeting banks and top groups, eroding public trust and causing deposit withdrawals.
   • This has worsened the liquidity crisis and undermined recovery efforts.

7. Economic Implications:

   • Experts warn that dismantling key banks and industries could weaken the private sector.
   • The export market faces threats as foreign orders shift to competing nations.
   • Allegations suggest a coordinated effort to destabilize industries, forcing investments and jobs abroad.

Efforts must focus on sustainable recovery strategies to ensure the survival of both banks and industries while preserving economic stability.