Officials of the Credit Information Bureau at Bangladesh Bank have been denied access to the CIB database for over a year and a half, allegedly to conceal borrowers’ default loan statuses.
CIB officials alleged that the restriction was imposed by former bank governor Abdur Rouf Talukder in collaboration with its information technology department, led by executive director Debdulal Roy, ahead of the January 7, 2024 general elections. This move was reportedly intended to allow defaulting businesspeople and politicians to compete in the election, as electoral laws bar defaulters to take part in polls.
They further claimed that the IT department continued the restriction to conceal past malpractices.
Debdulal Roy, bank’s executive director since 2019, was one of the most influential figures during Talukder’s tenure, and still enjoying the same IT head position.
According to CIB officials, the IT department took control of the database in July 2023 under the pretense of upgrading the system and has since restricted their access.
‘We now have to request borrowers’ raw data from the IT department for assessment. Initially, they promised access within a couple of months, but still denies our access to the database,’ said a senior CIB official.
In a further development, Bangladesh Bank has for the first time allowed bank branches to alter borrowers’ default statuses directly.
A letter issued on September 13, 2023, the central bank authorised both head offices and branch offices of banks and non-banking financial institutions to upload or amend loan data in the CIB database without prior approval from the central bank.
With 11,227 bank branches and 287 branches of non-banking financial institutions across the country now having access, concerns have escalated about potential data manipulation.
Bangladesh Bank executive director Husne Ara Shikha, referring to the CIB department officials, stated that these officials were currently denied access to monitor data submissions by banks.
The CIB officials cannot verify whether a particular bank has submitted data, nor can they view the data’s content or volume. Once uploaded, they can only generate reports and cannot validate the data, Husne Ara Shikha said, referring to the department’s officials.
They repeatedly requested the IT department for the access with the approval of the governor but the IT had yet not given them the access, she noted.
‘The Bangladesh Bank plays no role in updating or manipulating this data. Previously, data errors were reported via a file-based system. Now, they are reported immediately through a web-based format, enabling all banks and NBFIs to take immediate corrective action, which was not possible with the previous system,’ she also said.
Experts, however, warn that decentralising the access to the database down to the branch-level officials compromises the integrity of the CIB system.
Previously, only two authorised officials at a bank’s head office could upload or amend credit information, while changes required central bank approval. The new system allows widespread access, creating opportunities for data manipulation.
Critics pointed out that identifying misuse or manipulation of data would now require branch-level inspections, which would be resource-intensive and time-consuming. Some also warned that data could be temporarily altered to achieve illicit objectives and then reverted to its original state, allowing the perpetrators to avoid accountability on the pretext of mistaking.
The current governor, Ahsan H Mansur, who was once a vocal critic of the system’s widespread access, now remains silent on the matter since taking office.
Also, despite allegations Debdulal Roy continues to hold his influential position.
Debdulal couldn’t be reached for comments.
Selim Raihan, executive director of the South Asian Network on Economic Modelling, SANEM in short, told ¶¶Òõ¾«Æ· that it was alarming and unexpected that the same controversial system persisted despite the political shift, reflecting the entrenched influence of errant officials within the central bank.
He suspected that the system might have been deliberately structured to enable loan defaulters to qualify for national elections.
Selim also pointed out that the previous government employed various mechanisms to obscure loan default data, masking the staggering volume of non-performing loans.
He emphasised that the central bank must empower the CIB and other departments to operate independently to ensure transparency and accountability.
Established in 1992 to reduce default loans and ensure risk-free lending, the CIB remains as a key tool for monitoring loan irregularities.
It also provides the election commission with default information on bank loans of candidates who participate in national and local elections.
Data from Bangladesh Bank shows that non-performing loans rose by over Tk 1 lakh crore in six months, reaching Tk 2,84,977 crore in September 2024, up from Tk 1,82,295 crore in March. This represents 17 per cent of the total bank loans— the highest NPL ratio in South Asia.
The defaulted loan figure was Tk 2,11,391 crore at the end of June, Tk 1,45,633 crore in December 2023, and Tk 1,55,398 crore in September 2023.
Massive sums were allegedly taken from banks during the now-ousted Awami League regime through fraudulent loans reported as ‘regular’ via data manipulation and lenient policies, such as frequent loan rescheduling.
After the Awami League government was overthrown on August 5 in a student-led mass uprising, the actual extent of irregularities began to surface.
The total distressed assets in the banking sector, which include defaulted loans, rescheduled loans, and written-off loans, have reached nearly Tk 6 lakh crore, according to Bangladesh Bank’s ‘Financial stability report 2022’.
