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HomeEditorChange is essential in the banking sector

Change is essential in the banking sector

In fifty years the country’s progress and corruption have both progressed side by side. Many private banks are on the brink of collapse due to looting by the owners. Many of the looters are getting seats in parliament and cabinet. The speakers said these things in a discussion on the book entitled ‘Fifty Years of Bangladesh: Economy, Politics, Society and Culture’ edited by Professor Rawnak Jahan and Professor Rehman Sobhan at CPD’s Dhanmondi office last Thursday. The news of chaos in the banking sector is old. Extreme irregularities, corruption, mismanagement and lending to dubious institutions have led to the crisis. In the name of business management, the concerned businessmen and bank owners have digested huge sums of money from the country’s scheduled banks. Some of these banks are also in the process of being closed. In this situation, the government has started the work of merging weak banks with strong banks to establish good governance in the banking sector. However, there are reports of pressure on the central bank from various sides. Bangladesh Bank BASIC, Padma, Rajshahi Agricultural Development Bank, BDBL and National Bank are said to be working on merger. It remains to be seen whether this process will see the light of day. Since the money in the banking sector is the deposit of people’s hard-earned money, there is no room for the crooks in this sector to make any concessions. Weak corporate governance, weak enforcement of laws and lack of transparency have put Bangladesh’s banking sector at risk. Here the banking sector is controlled by individuals or institutions whose real interests lie elsewhere. Banks are controlled by prominent politicians or business group owners. Those who spend money on appointing bank MDs and CEOs are basically defaulters of crores of rupees. Political party leaders in state-owned banks and bank managers in private banks often wield influence and approve loans. Many times loans are given to less important institutions rather than proper institutions. These loans turn into defaulted loans over time. Even though there is strict monitoring of banks on small borrowers, cases under PDR Act etc., the bank authorities are not able to be strict to catch the influential defaulters. Various benefits and incentives have been given to the defaulters at various times to reduce defaulted loans. But the benefit did not come. The bright picture of Bangladesh’s progress and prosperity in various indicators of economic development cheers us up, but all enthusiasm stops when we see the increase in the amount of defaulted loans in the banking sector. Everyone is aware and aware of this from the top level of the government. The matter embarrasses everyone, there is great uneasiness among the government and banking sector stakeholders. Money embezzlement is not possible without the connivance of bank officials. In many cases fake documents and huge loans to non-existent institutions are proof of this. In order to bring transparency and accountability in the banking sector, first of all, the punishment of the bank officers and directors involved in every irregularity, including the defaulters, must be ensured.