Bangladesh Association of Banks (BAB), in an unprecedented move urged Finance Minister AMA Muhith to intervene and put a stop to what they claim is negative reporting on the banking sector.
The letter, signed by BAB Chairman Nazrul Islam Mazumder, has called for establishing an organization in line with the Financial Information Act to prevent negative publicity in the media. The said organization, once instituted, will work under the Finance Ministry and Bangladesh Bank.
In the views of private bankers, negative news may create panic among people and customers may lose trust in banks.
Their call, however, came in the backdrop of media reports that the directors and chairmen of a number of private banks were involved in some high profile loan scams in recent years.
In the wake of a liquidity crisis and increase in the interest rate on loans, the forum of commercial bank owners and directors submitted a nine-point proposal to the finance minister during a meeting on Friday.
Managing directors of 38 banks and chairmen of at least 25 banks were present at the meeting.
Asked about the BAB letter, Muhith on Sunday said: “Now is not the time to talk about this. The matter will be discussed in parliament during the next budget announcement.”
However, economists and banking sector analysts have strongly opposed the demand, saying any restrictions on the mass media may further worsen the situation as it was the latter that brought a series of loan scandals – including the ones involving Hall-Mark Group, Bismillah Group and Basic Bank – into light over the past few years.
[caption id="attachment_256575" align="aligncenter" width="1024"]
This image shows the portion of the BAB letter to the finance minister demanding establishment of an organization in line with the Financial Information Act to prevent negative publicity in the media Bangla Tribune
From media reports, people are also learning about irregularities and other fraudulent activities happening on a regular basis in the state-owned and private banks of the country, they said.
Former Bangladesh Bank governor Salehuddin Ahmed said an initiative to stop the media instead of preventing irregularities in the banking sector would not be a good sign.
“It is completely illogical to establish an organization under the Financial Information Act to stop negative reports. If any newspaper publishes false reports, the Press Council Act is enough to take action and also there are other ways to protest that,” he said.
Regarding their recommendations, BAB Chairman Nazrul, who is also the chairman of EXIM Bank, said: “The banking sector largely survives on trust. Negative news about the sector spreads fear and mistrust among people.”
About the proposed organization to prevent “negative publications in the media,” he said: “This matter is still being discussed at the preliminary stage. We will be able to say more about this after further discussion.”
Talking about the BAB proposal, AB Mirza Azizul Islam, former finance adviser to a caretaker government, said institutionalization of such an organization by formulating a law would only make the matter worse.
“The financial sector lives on transparency... If this happens, there will be a lack of transparency and negativity among the people will rise,” he added.
This article was first published on banglatribune.com