With all the excitement from last year’s Monsoon Revolution and talks of reforms and revitalizing the economy and steering it towards something better and more positive, our economic reality simply cannot be ignored -- our financial sector is in the worst shape that it has arguably ever been in.
While this comes as no surprise, when the Asian Development Bank (ADB) reports that Bangladesh now has the highest volume of defaulted loans in the entire continent of Asia, the authorities concerned must react. It ought to be a matter of national shame and embarrassment that we can be called as having the “weakest banking system” in Asia.
There are also warnings that numerous non-bank financial institutions (NBFIs) -- once touted as an alternative to traditional banks -- are on the verge of collapse, with 20 of these institutions having defaulted loans totalling Tk21,462 crore, an eye-watering 83% of their total loan disbursement.
It is time to listen to the experts, strengthen the institutions, empower those within the banking sector, and stop political interference and those who enjoy impunity as they continue to flout any and all rules to receive and then default on loans.
There have been talks of reforms ever since last year, but these reforms need to happen with immediate effect, and they must be bold and transformative. Above all else, this culture of bad loans that has become a part of our national identity has to stop, or it will be the result of not only the collapse of our banking sector as a whole, but with it, any hope for economic recovery.
