SOURCE: chainfor.com

It certainly seems so from the actions of the Bangladesh Bank, as it has given AnonTex the green-light to take more loans from other state-owned banks, after it had borrowed Tk 5,500 crore from Janata Bank through serious irregularities, and defaulted on Tk 557 crore loans with the bank. As mentioned in this column only a week ago, Janata Bank was found guilty of granting undue favours to big borrowers breaking all sorts of banking rules according to the findings of multiple BB investigations. Having revealed those irregularities, it seems the BB has now, for some reason, decided to also do away with its own rules.

The amount of AnonTex's previous loans from Janata was already 13 times the ceiling set by the BB. Even after finding through investigation that Janata had given large amounts of loan to the company via numerous irregularities—of which Tk 2,643 crore went bad—and stating in its own probe report that this could threaten the very existence of the state-owned bank, by what wisdom is the BB now granting AnonTex such favours?

Not only is this making a mockery of the BB's own rules, but by doing so, what sort of an example is the central bank setting for others? When regulators themselves decide that regulations need not be respected, what regulatory role are they fulfilling?

Let us not forget that it is the taxpayer's money that is being put at risk here. By favouring big defaulters over taxpayers, the BB is potentially risking any and all confidence citizens may have in the central bank's ability to regulate the financial sector and the well-being of the sector itself.