Cenbank must take its share of blame for banks suffering trust deficit

After independence, depositors of money never lost their trust in banks to the degree as they have done during the 14 years tenure of this government.

The large-scale loan scams in Farmers Bank, Basic Bank, Sonali Bank as well as some Shariah-based banks including the Islami Bank Ban, Social Islami Bank and First Security Islami Bank have seriously jolted people’s faith in the country’s banks so much so that people are increasingly opting for keeping cash with themselves than in banks.

In the economy of a modern democratic state, banks’ role is very crucial, and the wholesale loss of depositors’ trust in banks of Bangladesh means the state system here has become very fragile.

Banks are now in the hands of people with dubious business records, where a great want of integrity is now acutely felt.

Recently the Governor of Bangladesh Bank, the overseeing authorities of all banks in Bangladesh, have admitted to this trust deficit of depositors and urged, rather naively, banks to find out the reasons behind people opting to keep cash with them than in banks.

As if he does not know what has happened with the banks of Bangladesh! Should he be also reminded that there was a heist of Bangladesh Bank of which he is now the Governor? The heist was not only rare in the history of banks of Bangladesh, but also all over the world.

If Bangladesh Bank all through its discharging its duty with transparency and accountability The Governor would not have to express its concern over the reality that the amount of cash going around has increased 2 per cent to 3 per cent in recent times.

According to the BB data the amount of cash outside the country’s banks soared to Tk 263,373 crore in April, which was at Tk 254,668 crore in March 2023. This sign is really ominous.

The BB’s lenient attitude towards the big loan defaulters and slack monitoring over alleged illegal activities in banks is also greatly responsible for corrosion of people’s trust in banks in general.

How is it possible that some banks are not providing correct information to the central bank which is remaining idle over the matter without taking any action? Collapse of the banking system will be taken as one pertinent example of Bangladesh becoming a failed state.

Unless the banks are freed from the unholy grip of swindlers who are masquerading as politicians and businessmen who are directly or indirectly involved with the government, it is difficult to check the deteriorating health of Bangladesh’s banking system.