Some of the ideas proposed by the committee could greatly benefit the industry
There is no denying that incompetence and corruption have resulted in our banking sector potentially bringing our economy to its knees.
In large part due to gross negligence and mismanagement, coupled with an ongoing culture of nepotism and lack of concrete regulations, the total amount of non-performing loans stood at a staggering Tk93,911.40 crore as of December 2018.
What is worse is that a major portion of these defaulting loans belonged to state-owned banks -- which have been supported by capital from the national budget.
It is in this context that we appreciate the government following through with its pledge and forming several committees which could bring about some much-needed control and stability to the banking sector.
There could not have been a better time for the formation of these committees as we can no longer stand back and watch as the taxpayers’ hard-earned money continues to be wasted.
What is encouraging is that the committees are being headed by some of the most experienced people from Bangladesh Bank and our finance ministry, and will specialize in tackling various problems, from investigating and evaluating specific banks to reforming the defaulting policy.
Some of the ideas proposed by the committee could greatly benefit the industry, such as the merging of weaker banks or the creation of a separate bench in the High Court that would deal only with cases of defaulting loans.
However, there is no denying that the banking sector, in its current state, is sensitive, and we hope that, moving forward, the committees will act with caution and consider all stakeholders as part of the reformation process.
At the end of the day, for true change to take effect, our banking sector must be fixed from the inside-out, and everybody involved in the process must be held accountable for their actions.
This is of utmost importance if we are to reverse the damage caused to our banking sector and our economy.