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'Banking sector akin to abused orphan now'

  • Published at 02:42 pm April 17th, 2018
  • Last updated at 09:25 pm April 17th, 2018
'Banking sector akin to abused orphan now'
The Centre for Policy Dialogue (CPD) has criticized the country's banking regulators for “abusing” the sector and likened it to “an orphaned child.” Speaking at a press conference on Tuesday, Dr Debapriya Bhattacharya, distinguished fellow of the Dhaka-based independent think tank, said: “Before, we said 2017 was the year of banking scams. Now, the situation in the banking sector is such that it is like an orphaned child. “The regulators, who should be protecting the orphaned child [the banking sector], are now abusing it in various ways and in the face of pressure from various fronts.” The CPD organized the press conference to present their recommendations for the upcoming budget at the CIRDAP Auditorium in Dhaka. Debapriya further said the ongoing liquidity crisis in the banking sector is not the disease, but a symptom. “To recover from this situation, we recommend that the government adopt moderate macroeconomic management,” he added. Fearing the possibility of money laundering before the upcoming election, Debapriya said financial scams, non-performing loans, inefficiency, and poor monitoring and supervision by the regulators have crippled the banking sector. “Before every election, the remittance flow increases but more money gets laundered,” he said. “The money is basically embezzled and laundered through three channels – banking sector, unstable capital market, and high import payments.” He said private sector investment in the country’s economy had become stagnant in the last few years, and currently the growth was mainly fuelled by public sector investment. “The credit growth increased in the private sector, but investment did not increase. Where is the money going, then?” he asked. CPD Research Director Towfiqul Islam Khan presented analytical recommendations of the think tank for the budget of 2018-19 fiscal year, urging the government to design the budget for a stable macroeconomy. CPD Executive Director Dr Fahmida Khatun moderated the program, where Distinguished Fellow Prof Mustafizur Rahman and Additional Research Director Khondaker Golam Moazzem spoke as well. In his speech, Moazzem said in the country's capital market, the roles of institutional investors and small investors were still almost the same. “As institutional investors like banks play a significant role in controlling the capital market, there should a proper monitoring mechanism in place,” he added.