Quick reforms needed to instill good governance in banking sector

The siphoning off Tk 92,261 crore from our banking sector through 28 major scams since 2008 serves as compelling evidence of the government’s inability to instill good governance and implement necessary reforms in the sector.

This staggering amount constitutes approximately 12.1 per cent of this fiscal year’s total budget and 1.8 per cent of the country’s GDP.

The detrimental impact on the economy stands out as one of the most significant challenges faced under the incumbent government since it took office in 2009.

In 2008, just before the Awami League assumed power, defaulted loans amounted to Tk 22,000 crore. Fast forward to the present, and this figure has skyrocketed by over seven times to Tk 156,040 crore.

This calculation excludes loans in special mention accounts, those with court injunctions, and rescheduled loans, factors that could significantly inflate the total.

The sector has been marred by irregularities over the years, exacerbated by regulators, particularly the Bangladesh Bank, providing what appears to be lenient oversight, if not outright free passes.

The current state of the sector, coupled with the concerning lack of regulatory oversight, raises the specter of a potential crisis that could unleash widespread turbulence on both the banking sector and the economy at large.

The erosion of corporate governance within banks is palpable due to the unchecked irregularities witnessed over the years.

Regulatory bodies, once entrusted with ensuring accountability, seem to have given way to providing undue favours to powerful interests.

As a consequence, the “looting” of our banking sector has substantially fueled the surge in inequality since 2010.

The apparent complicity or, at the very least, the obliviousness of authorities underscores the pervasive lack of accountability that characterizes the current state of governance in the country.

It is imperative for citizens to demand accountability from government officials, whose detachment from public oversight has allowed vested groups to shape policies for their own benefit.

The unchecked pillaging of the banking sector has significantly contributed to the alarming rise in inequality.

It is incumbent upon the people to reclaim their voice and hold government officials accountable, as the current trajectory suggests that the government’s hollow promises of sector reform are unlikely to materialize without public insistence.

Without such accountability, it remains doubtful that the government will prioritize the interests of the general populace over the oligarchs, and genuine improvements to the sector will remain elusive.