'Tk2,000 crore set aside for banks can be swept aside like a speck of dust. This will have no impact in reducing the bank’s deficit. So we need structural reforms'
The Centre for Policy Dialogue has called for steps to form a transparent reformation commission to put an end to banking scams.
The local think tank also stressed on the need for political goodwill to this end.
CPD made the observations at a national budget discussion titled National Budget FY2017-18: Post-Approval Observations, held in Brac Centre Inn in the capital on Monday.
Dr Debapriya Bhattacharya, Distinguished Fellow of CPD said: “Lack of political goodwill is responsible for the theft or looting in the banking sector. So a transparent reform commission is necessary to end this practice.
“Besides, absence of good governance in the banking sector, lack of Central Bank oversight and poor supervision by the finance department are factors that have led to the present situation. Even if there was no political interference, the situation would continue to persist due to lack of institutional capacity,” he also said.
Dr Debapriya Bhattacharya presented the key-note paper at the press conference organized by CPD. The CPD also shared its post budget recommendations for the current fiscal year.
Debapriya said that the situation was not the result of only corrupt individuals but deep institutional issues. Political economy is the most important determinant in the development of the county. Lack of political goodwill is the main reason behind the situation in the banking sector. So discipline has to be brought to the sector to stop looting.
“If political goodwill was there then those who are monitoring it can exercise power and the Security Access Commission can take action. These situations can then be avoided,” he added.
He also added that it is a good practice to take certain exemplary action. If action is against these irregularities and those responsible for them, before the national election, then the people would be happy with the ruling party. To this end, the government should form a banking commission and our recommendations should be implemented.
Debapriya said, some Tk10,145 crore has been allocated as incentive to be invested in different sectors, including stock markets, for the fiscal year 2017-18. There should be supervision on how this money is being used.
“Tk2,000 crore set aside for banks can be swept aside like a speck of dust. This will have no impact in reducing the bank’s deficit. So we need structural reforms.”
There is some scope to rein in the budget in the non-development expenditure. There is a block allocation of Tk3,327 crore and the government should mull whether there is an opportunity to avoid spending this money, he said. Besides, Tk1,066 crore given to the Planning Ministry should also be spent with caution.
CPD Executive Director Professor Mustafizur Rahman, Director Anisul Fatima Yousuf, Acting Director Fatima Khatun, Khondoker Golam Moazzem and Researcher Towfiqul Islam Khan were present there.