Subsidies for banks are to avert disaster

The government is giving subsidies to state-run banks so that it can avoid a disaster in the banking sector, Finance Minister AMA Muhith said in parliament yesterday.

“The entire country may collapse if there is a disaster in the banking sector. That is why the government is taking measures,” he said in reply to scathing remarks by some Jatiya Party (JP) and independent MPs.

Speaking on a motion, the lawmakers came down heavily on the minister over widespread corruption, irregularities and looting of huge amount of money from different state-run banks.

They said the banking sector was in a “critical state” as money of private banks was also being laundered by the relatives of the bank directors, who are loan defaulters as well.

The MPs also lambasted Food Minister Qamrul Islam for the hike in rice prices.

They demanded that the government allocation for Monthly Pay Order (MPO) system, and improved public health service are increased.

They also opposed a proposal by the finance minister to grant Tk 53,833 crore to the finance division for accomplishing various development and non-development work within June 30 next year.

The lawmakers alleged that private banks had been turned into “family businesses” as the government increased the number of directors, who include family members of other directors.

In reply, Muhith said the relevant law was being scrutinised by the Jatiya Sangsad committee concerned, which would come up with its recommendations.

“I will be able to let you know about the government's stance in this regard after getting the report,” he said. 

 Amid MPs' criticism that there was no good governance in the banking sector, the minister said the government was working very hard to ensure the good governance. 

“And you all can see the result in the money market…You will also able be to see its result in the banking sector.”

“Currently, there are 58 banks operating in the country. Many may say that having 58 banks is not good for a positive economy. But I will just say that different countries are working in the same manner. There will be consolidation in future and I am waiting for that future.”

 Muhith then rejected an allegation brought by some MPs that the government was providing subsidies to banks without any reason.

“Banking sector is a sensitive sector. If any disaster takes place in a bank, it puts an adverse impact on all. That's why we take steps,” he said.

JP MP Nurul Islam Milon said many relatives of bank directors are becoming directors of the institutions and taking loans.

“The directors are taking loans of over one lakh crore taka and becoming loan defaulters,” he said.

He said the sector was being held hostage by the bank owners and the directors.

JP MP Kazi Firoz Rashid said, “Public banks have already been looted and now, the private banks are being robbed by the family members [of directors] who are also directors [of the banks].”

“They are establishing politics of looting in the banking sector,” he said.

Independent MP Rustum Ali Faraji proposed formation of a bank commission to “restore” discipline in the sector.

In response to demand for increasing MPO facilities for school and madrasa teachers, Education Minister Nurul Islam Nahid said the government had already formed a committee headed by the state minister for finance to finalise the relevant guidelines.

“I hope the finance minister would work to ensure the allocations on the guidelines to be prepared by the committee,” he said.

FOOD MINISTER UNDER FIRE

Qamrul Islam yesterday told parliament that his ministry was collecting quality rice and wheat this time and there would be no questions about their standards.

 “This time wheat having the quantity of 12 proteins will be imported. There will be no scope to raise questions about the quality of rice and wheat,” the minister said, while responding to cut motions brought by a number of opposition and independent MPs over the budgetary allocation proposal for the food ministry in the fiscal year 2017-18.

Qamrul said MPs came down heavily on him due to price hike of rice in recent times.

He said recent flash flood in haor areas damaged at least six lakh metric tons of boro paddy. Besides, blast disease and excessive rain damaged boro paddy in some other places.

“Taking advantage of the situation, a group of unscrupulous businessmen raised rice prices,” he added.

 “An artificial crisis created today's sudden situation. There is no crisis of rice. We've enough stock. There'll be no more problems as the import duty on rice has been reduced,” he said.

The minister also explained why the government delayed reducing import duty on rice saying that the government wanted the farmers to get fair prices. “Had the duty been reduced earlier, the farmers would not get fair prices,” he added.

Noting that VGF programme should be scrapped, the minister said the government was providing 150kg rice to those who are ultra-poor.  “After all this, what is the necessity of a VGF card?,” he asked.