Saturday, June 22, 2024


Dhaka Tribune

Don’t break the bank

The entire sector needs sweeping reform 
Update : 26 May 2024, 04:21 PM

As things stand, our banking sector has far too many problems facing it: From constraints regarding liquidity, the overall dip in our foreign exchange reserves, the high numbers of non-performing loans, the list is simply too long.

It is hardly any surprise then that lack of transparency can now also be included into that growing list of issues which are putting the entire sector at risk of a potential collapse.

According to the Centre for Policy Dialogue (CPD), banks failing to disclose their performance data to the public, while the information they do provide regarding institutional health might not be entirely reflective of reality. Coupled with the Bangladesh Bank’s recent denial of access to journalists into their compound, the entire sector appears to be waging a veritable war on the public’s right to information regarding its health.

When crucial information is not disclosed to the public, is it any wonder that people are now starting to withdraw money from banks? As we have seen with our tax system, when trust starts to erode from the entire infrastructure it invariably ends up hurting the nation itself.

Our banking sector is getting everything wrong, it appears. Issues such as bad loans have always existed in the background with next to nothing in the way of improvements, while negative returns for depositors, net losses, and the above-mentioned war on the very idea of transparency in the sector are only compounding its miseries.

It is clear as day that the entire sector needs sweeping reform if it wishes to even stay afloat in the near future.

It needs to clamp down on bad loans without delay specifically targeting repeat offenders who have made it a habit to profit at the expense of the banking sector itself, the sector also needs to reorient itself with the principle of transparency in order to claw back some of the public faith it has lost over the years.

The list of issues plaguing our banking sector is comprehensive, which is why any remedial measures will need to be as comprehensive as well.
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