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‘Strong central bank needed to revive banking sector’

  • Published at 12:47 am April 7th, 2018
  • Last updated at 12:48 am April 7th, 2018
‘Strong central bank needed to revive banking sector’

‘State-owned banks are being ruined slowly’

At the roundtable, Khondoker Ibrahim Khaled, former deputy governor of Bangladesh Bank, said: “The state-owned banks were destroyed in numerous ways. It has not happened in a day, these banks are being ruined slowly. The fall began after the introduction of finance banking division at the Ministry of Finance. Corruption went on unabated since then. There are many questions about the authority of Bangladesh Bank behind the disaster of the banking sector.” He said: “Those who run business without following any rules and regulations are responsible for the current sorry state. Who is strong-- the government or the thugs? The thugs do not want honest business persons coming in their way. Despite that, economy index is quite impressive over the last several years. The growth has increased gradually.

‘Banks are always likely to face disaster’

IFIC Bank Managing Director Shah Alam Sarwar said: “Currently the country’s banking sector is a commercial sector. We have no investment bank. There has been a structural imbalance in the country’s banking sector from the very beginning. That is why banks are always likely to face a disaster. He said: “If anybody withdraws money by irregular means either from a bank or somebody else’s pocket it is corruption. It is everybody’s responsibility to track down these corrupt persons. But when anybody takes loans from a bank they say they have withdrawn money, then again when banks give loans they say the money is taken away. These statements create an adverse effect among the public about banking system.” He further said: “Capital is a must for business. There can be numerous sources of capital. A person can take loans to accumulate the capital. We never had huge capital. We do not have gold mine or huge resources. The business starts with a small amount of capital. We have moved forward under capitalism structure but banking legal framework has not developed. It is based on faith. If the faith is lost then the collapse will be imminent.”

‘Private banks have huge contribution to the country’s economy’

Premier Bank Director Abdus Salam Murshedy said: “Private banks have huge contribution to the country’s economy. For taking the banking sector more forward, if the government funds are kept in private banks there will be no liquidity crisis. “We have to change our perceptions. Some 20-25 years back, our parents were service holders or farmers. Now people tend to pursue business. If any minor irregularities happen in a bank it is talked about in such a way that it seems the overall banking sector is destroyed. We have to come out of this tendency.”

‘Weakness prevails in banking sector’

Centre for Policy Dialogue Economist Khondaker Golam Moazzem said: “We have been observing a feeble situation in the banking sector for the last six or seven years. According to the global economy ranking, Bangladesh’s economy has made progress but the banking sector remains weak. There is weakness in the economy of the overall banking sector. It does not mean that the country’s economy will collapse due to the banking sector all of a sudden; however, it will create a long-term crisis. “We have problems with perspectives. Sometimes individuals are given more priority than institution, even sometimes the organization becomes more important than the government. In Bangladesh, loans are stuck due to a number of large groups. The ownership of banks is controlled by some big business groups. We have to see if the situation recurs in the future. The central bank has the authority to make any policy or decision. These decisions should be implemented.

‘Banking sector lacks discipline’

Bangla Tribune reporter Golam Mowla said: “The current state of banking sector is critical. The financial crisis in the sector deepens due to a number of factors like liquidity crisis and aggressive loan disbursement. The problem has been created due to a lack of discipline in the banking sector. Bangladesh Bank or the regulators are indifferent to the issue but the central bank should be in a strong position to control the situation.