Former planning minister MA Mannan emphasised the need for considering a person’s minimum experience and professionalism when appointing a director to financial institutions on behalf of the government.
“In the past, many young and inexperienced people were appointed as directors to financial institutions on behalf of the government without considering their qualifications,” said the politician while addressing a dialogue organised by the Centre for Policy Dialogue (CPD) as the special guest.
CPD Executive Director Dr Fahmida Khatun presented the keynote at a programme titled “What Lies Ahead for the Banking Sector in Bangladesh?” held at a city hotel today.
Speaking at the dialogue as the special guest, the parliament’s opposition party leader Barrister Anisul Islam Mahmud emphasised bringing individuals involved in looting the financial sector to justice before implementing the idea of merging weak banks with strong ones.
Stating that Bangladesh Bank has a major part in the instability in the banking sector, Anisul Islam questioned, “Why did the Bangladesh Bank announce all of a sudden that the financial health of 10 banks has deteriorated? Why isn’t the central bank taking regulatory measures to improve the condition?" He said the Bangladesh Bank has completely failed as a regulatory body.
“Although everyone was aware of the crisis in Basic Bank, no steps were taken to recover it. Now the people have to bear the responsibility,” the politician added.
He advocated for evaluating the assets the bank possessed before the merger and bringing those involved in the looting of Tk4000-5000 crore to justice.
“The Bangladesh Bank’s plan to allow the director to return to the bank’s board after five years is not a solution; rather, it’s a recipe to destroy the banking system,” he added.
Speaking at the event, senior journalist Syed Ishtiaque Reza raised the question of whether the practice of non-governance has worsened to the level of willful defaulting.
He said a nexus comprising businessmen, banks, and people with affiliations to power holders in the government has created a rent-seeking culture in the banking sector.
“The idea of creating a bank is invalid in Bangladesh; rather, the banks are distributed among people enjoying political favor,” said the journalist.
He mentioned that the then finance minister ignored criticism to award licenses to three banks in 2019.
He said, “Farmer’s Bank was destroyed by the person who was tasked with saving it. Bacchu destroyed the bank. PK Halder, involved in the scam of looting thousands of crores from the financial sector, could not be apprehended in Bangladesh but was later arrested in India.”
Addressing the programme, CPD distinguished fellow Mustafizur Rahman said the banking sector deserves special importance given its significant contribution to investment, growth, distribution, and employment creation.
Noting that the government and Bangladesh Bank have many initiatives to establish good governance in the financial sector, Mustafizur Rahman said these initiatives need to be implemented cautiously.
He cautioned that many times, profits are privatised and losses are nationalised.
Former planning minister Mannan said the government needs to be cautious while issuing licenses to new financial institutions.
The formation of the Banking Commission will not yield significant results if these issues are not addressed, he added.
