• Tuesday, Dec 01, 2020
  • Last Update : 10:57 pm

No more bailouts

  • Published at 12:00 am August 27th, 2019
Can a banking commission remedy banking sector problems?
Photo: Dhaka Tribune

Private banks have outperformed SOBs in literally every area

Better late than never. 

It is good to see the government finally take a hard stance against loss-making and poorly performing state-owned banks, with Finance Minister AHM Mustafa Kamal saying yesterday that SOBs would no longer be recapitalized by the government.

State-owned banks, then, must learn to function efficiently, earn profits, and pay taxes just like everybody else.

In other words, they must perform or perish.

In the past, Bangladesh’s endless loss-making SoBs enjoying refinancing, or recapitalizing, year after year to cover losses, creating a vicious cycle where banks were simply not held accountable.

But it is good to know that times of coddling SoBs are gradually coming to an end, although the problem of non-performing loans will persist for some time; however, the finance minister has said the issue will soon be settled, which gives us some hope.

Thousands of crores of public money has been wasted in propping up banks which have not shown any signs of cleaning up their act; recently the FM instructed all loss-making branches of Basic Bank to shut down, and we hope this will be extended to other banks as well.

The simple fact is, private banks have outperformed SoBs in literally every area -- not only do they consistently demonstrate greater efficiency, they tend to be free from political influence, and the high degrees of corruption which afflicts state-owned banks.

At this critical juncture in Bangladesh’s development history, it is more important than ever to have a robust banking sector, and the government’s recent move gives us hope that the matter is being seen with sufficient urgency.

64
54
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail