THE banking sector has been plagued by numerous irregularities over the past fifteen years, leading to a fragile state.
A report published in a vernacular daily on Friday highlighted the most pressing issues, including rampant bad loans and money laundering facilitated by the misuse of banks for criminal activities.
What is more concerning is that despite widespread awareness of these problems, senior bank officials, often under pressure from higher authorities, have either ignored these irregularities or even profited from them.
These concerns were raised during a webinar titled “Eliminating Occupation in the Banking Sector: Will the Misery End?” organised by the Forum for Bangladesh Studies. Various experts shared their insights into the challenges facing the banking sector.
Experts opined that to address this deep-rooted crisis, a comprehensive investigation is imperative.
While the government has taken steps to restructure bad loans and recover laundered money, a deeper dive into the underlying causes is necessary to implement effective solutions.
Industry insiders have highlighted the need for a forensic audit to identify the individuals involved in these corrupt practices and to understand the full extent of the damage.
The banking sector’s governance structure also requires significant reform.
The current system, where depositors’ money is managed by individuals who do not have direct stake in the banks, has contributed to the misuse of funds.
A more equitable system, where depositors have a greater say in the management of their banks, could help prevent future abuses.
Islamic banks are supposed to adhere ethical principles, have also been implicated in these irregularities. A thorough investigation into the deviations from Islamic banking principles is necessary to understand how these institutions have contributed to the crisis.
No doubt that the Bangladeshi banking sector is facing a critical juncture. To restore public trust and ensure the stability of the financial system, a multifaceted approach is required.
This includes comprehensive investigation, reforms in governance, and a return to ethical principles in Islamic banking.
With the guidance of Dr. Ahsan H. Monsur, a respected economist now leading the central bank, and the new Economic Adviser, Prof. Dr. Salehuddin Ahmed, a former governor of Bangladesh Bank overseeing the finance ministry, we can be hopeful that Bangladesh can overcome these critical issues and build a more resilient and trustworthy banking sector.