The government’s Bank Division will monitor operational activities of the state-owned banks and non-bank financial institutions to ensure accountability and transparency, said a top official.
“Earlier, board of directors used to monitor, but now the division will do the job since the government is the owner of the institutions,” said M Aslam Alam, secretary to Bank and Financial Institutions Division.
He said: “It’s paradigm shift in supervising the state banks taking the responsibility from the boards.”
Chairmen, directors and managing directors will also be brought under the government’s strict monitoring to rein in rampant corruption in the state-owned banks, the secretary told the Dhaka Tribune yesterday.
He was coming out of a review meeting on macro parameters of the state-run banks. MDs of all the state-owned banks and financial institutions attended the meeting held at the finance ministry auditorium.
M Aslam Alam said the banking division will sit at three-month intervals to review the state banks’ performance and at two-month intervals to discuss the administrative issues including audit matters.
In broad judgment, the Sonali Bank along with all other state-owned banks except BASIC Bank are doing good in cutting down capital deficits and default loans, secretary said.
“Sonali Bank already slashed the capital shortfall of Tk1,000 crore last year while the government injected only Tk1,995 crore in the beginning of 2013.”
On the BASIC Bank, he said: “The bank has just got a new board of directors and MD, so they will need time to recover the loss from default loans.”
In reply to a question, the banking secretary said as the owner of the state banks the banking division wants to regulate them.
“We want to monitor the state banks. Besides, it is not possible for Bangladesh Bank to closely monitor the state banks and as the owner, the government has also a responsibility to ensure good financial conditions of the state banks.”
Aslam Alam also said the division will sign performance contracts with the boards of directors of state banks within a short time.
On BASIC Bank, the secretary said legal actions will be taken against the allegedly corrupt directors and officials after new MD starts his work.