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TIB opposes Banking Commission under central bank

  • Published at 10:21 pm November 7th, 2019
Photo: Mahmud Hossain Opu/Dhaka Tribune

Earlier on Wednesday, Finance Minister AHM Mustafa Kamal said that a ‘banking commission’ would  soon be formed

Transparency International Bangladesh (TIB) on Thursday said that formation of a Banking Commission under the leadership of Bangladesh Bank would not be fruitful.

“It will be a meaningless and unwise decision, if the proposed Banking Commission is formed under the leadership of the central bank,” said Iftekharuzzaman, TIB executive director, says  a press release. 

He said that the commission would not be able to review the prevailing situation within the banking sector in an impartial manner due to conflicts of interests; thereby, the commission would ultimately fail in its attempts to formulate an effective recommendation for banking sector reform.

Iftekharuzzaman urged the government for forming an independent commission, so that the commission can formulate the recommendation and do its other activities without any interference. 

Earlier on Wednesday, Finance Minister AHM Mustafa Kamal said that a ‘banking commission’ would  soon be formed under the leadership of Bangladesh Bank for reviewing the health of the banking sector.

“We observed that the central bank repeatedly failed to perform its regulatory role independently. Moreover, it faced interference from an unscrupulous group, responsible for the prevailing crisis in the banking sector,” Iftekharuzzaman said. 

He, however, expressed his appreciation concerning the government’s decision to form a banking commission, saying that the move was a good sign.

TIB executive director said that the future of proposed commission was bleak, if it was placed under Bangladesh Bank. “The commission should be formed as an independent entity, consisting of a number of unbiased and acceptable individuals, who are experts on banking sector,” he added.  

Iftekharuzzaman said that the banking sector was now passing through a crisis period with a huge liquidity crisis and rising non-performing loans. He believes that an independent, interference-free and strong banking commission can improve the situation.