Published:  12:17 AM, 26 May 2023

Corruption and irregularities in banks should be eliminated

When people find that banks and financial institutions regularly get involved in unethical practices and scams, they get scared and start to lose confidence on banking and financial systems. In this post-pandemic period and global geopolitical hazards, regaining people’s confidence on the banking sector is essential to save Bangladesh’s economy from further perils. Under these circumstances, economists have stated that the regulatory authorities should tighten surveillance on the country’s banking system, particularly on private banks.

Bangladesh Bank’s Governor Abdur Rauf Talukder said a couple of months ago that the directors of some banks think that they are the owners of these banks. This is a wrong perception. Around 90% money deposited in banks belongs to the country’s general people while bank directors hold approximately 10% of the total money deposited in their banks. The Asian Age stated the same point in a report titled “Are banks gambling with depositors’ money?” which appeared on 4 September 2022. A similar statement came up in an article titled “Trust versus Mistrust: Which way to go?” which appeared in The Asian Age on 12 January 2023.

High Court has meanwhile ordered banks and financial institutions to publish on their websites the names and particulars of the individuals to whom they pay loans. Moreover, High Court remarked a few months ago that the country’s most heinous crimes are being committed in the banking sector.

Up to the end of September 2022, loans of 16 lakh 29 thousand 735 crore taka were distributed by the banking sector of Bangladesh. Out of this amount, 1 lakh 36 thousand 440 crore taka has become defaulted loans which is nearly 9% of the total disbursed credits. However, unofficial sources have reported that there are defaulted loans of around 2 trillion taka including written off debts. Such high figures of defaulted loans have put the country’s banking arena in a hopeless plight.

The banking and financial sectors suffered most during the immediate past Governor of the central bank from 2016 to 2022. There is extreme lack of good governance in banks. Even some banks appoint directors in their boards without seeking approval from Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank.

The authorities concerned should work hard to constitute good governance and accountability in the banking sector so that depositor’s money remains safe and secure. At the same time it is essential to keep banks away from political influence.

The central bank and other regulatory institutions should carry out firm and uncompromising drive to recover defaulted loans to sustain the country’s banking sector. At the same time the safety of depositors’ money has to be ensured.

All banks are under obligations to keep the money of depositors in safe and sound shape. The regulatory authorities should not compromise with any bank or financial institution in case of graft and anomalies.

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