Bangladesh Bank lost its ability, to make independent decisions for the banking sector, and it’s now operating to implement decisions of outsiders, which is unable to resolve the crisis in the banking sector, said eminent economist Fahmida Khatun.
The executive director of the Centre for Policy Dialogue (CPD) made these remarks on Saturday (18 May) while speaking as the chief guest at the shadow parliament debate competition organised by the Debate for Democracy at the FDC Auditorium, in the capital.
“The culture of transparency and accountability is being lost in various regulatory bodies, including the central bank. As a result, the institutions are not able to fulfill the responsibilities, that the state assigned to them," said Dr Fahmida.
Currently, the anarchy in the banking sector has reached such a level that the decision to merge banks has to be taken on the advice of the IMF, she pointed out.
However, due to a lack of prior preparation, integration has been challenged. Forced bank mergers may not be sustainable. The banking sector has lost its ability to support the overall economy due to a lack of good governance, said Dr Fahmida.
She said that people have lost confidence in the banking sector. The central bank even cannot provide any guarantee to keep the deposits in the bank safe
As a result, there has been concern among depositors. Those responsible for the haemorrhaging of the banking sector remain untouchable. People are not able to know the correct information about defaulted loans in the banking sector from the BB, Dr. Fahmida opined.
Referring to the Bangladesh Bank's recent decision to restrict the entry of journalists, Chairman of Debate for Democracy Hasan Ahmed Chowdhury Kiran said the central bank owes them (journalists) an explanation.
“Journalists have played a major role in publishing news of major irregularities in the country's financial sector, it is not a crime, but their professional responsibility to highlight any irregularities [of the banking sector] in the media, including the heist in the BB's reserves,” the state minister said.
