Bangladesh chief Mohammad Yunus
Since the coup of Sheikh Hasina in Bangladesh, Mohammad Yunus’s country is not taking its name. Now a case has come up where the rigging of thousands of crores has been revealed in 6 Islamic banks, after which the suspicion has deepened that this scam has been done in the name of religion. The asset quality from international auditors KPMG and Ernst & Young has shown that six Sharia-based banks in Bangladesh are victims of a malfunction. Their non-performing loans (NPL) have increased four times more than earlier reports.
Reviews were started in January with the support of Asian Development Bank. Banks that were reviewed include First Security Islamic Bank, Social Islamic Bank, Union Bank, Global Islamic Bank, ICB Islamic Bank and Exim Bank. During the review, it was found that these banks are victims of deep financial mismanagement and have been presenting suspicious figures to regulators for years.
The most rigged among these three banks
Till September last year, forensic audit, which examines the financial statements of banks, presents a completely different picture from the official record. While the report of Bangladesh Bank reported that six lenders had a total of 35,044 million taka NPAs, according to the assessment of international auditors, this figure has reached 147,595 crore taka.
This rigging is particularly clear for three banks. The NPA ratio of the First Security Islamic Bank was found to be 96.37 percent, which is much higher than the 21.48 percent mentioned by it. Similarly, the NPA ratio of Union Bank is 97.80 percent as compared to the earlier 44 percent and the Global Islamic bank’s NPA ratio has increased from 27 percent to 95 percent. During the review, there was also a huge shortage of capital. According to the Esset Quality Review (AQR) report, by September last year, the lack of joint provision for all six banks had reached 115,672 million taka.
AQR an essential step
Mohammad Arfan Ali, a banking expert and former managing director of Bank Asia, said that AQR was a very step to highlight the real situation of Islamic banks. This will help determine whether the banks will continue to function independently or the government will have to temporarily acquire them with capital assistance and later they will have to hand over to private ownership or other investors.
