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Bank & Finance - December 26, 2023

True picture of bank failures even more dire

Expert opinion on CPD report

Staff Correspondent : In the report of the private research institute CPD (Center for Policy Dialogue) it has been said that Tk 92 thousand crore have been looted from banks in 15 years. But this is a partial picture. The real facts are even worse. Most of this money has been smuggled abroad. These will not return to the bank. This reality must be accepted. Top three economists of the country said these things while talking to Daily Industry. According to them, loan fraud is increasing gradually. The main reason is the wrong policy of the government. Because of this wrong policy, criminals have benefited. And such events are profitable for both criminals and policy makers. As a result, no exemplary action is being taken against the criminals. They say that political will from the highest level of the government is necessary to stop such incidents. Otherwise, there is no solution for now.
Those who made these comments are the former caretaker government’s finance advisor AB Mirza Azizul Islam, Executive Director of Policy Research Institute (PRI). Ahsan H. Mansur and former president of Bangladesh Economic Association Mainul Islam. Incidentally, CPD published a report on Saturday about the ongoing crisis of the country’s economy and what to do. According to that report, Tk 92,261 crore have been looted from the country’s banking sector in 24 incidents in 15 years. CPD analyzes the various reports published in the newspaper and presents the information. In addition, the report says that the current crisis, the overall economy of the country has not faced such a challenge before. The economy is becoming increasingly fragile. Declining revenue. The banking sector is getting weaker. Inflation is increasing. In five years, commodity prices have increased from 9 percent to 400 percent. International pressure on labor issues is also increasing. In this situation, if effective initiatives are not taken in this sector, foreign trade and exports may be hindered. According to the organization, major reforms are needed to solve the crisis in the economy. In this case, political will from the highest level of the government is essential. Yugantar talks to leading economists on these issues.
If asked, the former caretaker government’s finance advisor AB Mirza Azizul Islam told that for a long time there has been fraud in the banking sector. Far from stopping, it is steadily increasing. Bank defaults are increasing. One of the reasons for this is that there is no precedent in taking action against defaulters. He said that political decision from the policy-making stage of the government is necessary to stop defaulters and fraud. Because, if there is no political will, it will not stop. He said, some people are talking about forming a commission in the banking sector. In this case, ‘assuming a banking commission is formed’, the commission will give a report – if there is no political will, who will implement the recommendations of the report and how.
If asked, PRI executive director Dr. Ahsan H Mansoor told that the information given by CPD is partial. The true picture of fraud in the Bangkok sector is even more dire. It is increasing. This is because no action is being taken in this regard. He said, fraud is happening, defaulted loans are increasing. But I am not aware that any action has been taken against those involved. As a result, I do not see any solution. Ahsan H Mansoor said the CPD has painted a picture of looting. But they could not say that action has been taken against some. Because exemplary action has not been taken against anyone. And it does not seem that such action will be taken. Because such fraud is profitable for everyone (criminals and policy makers). He said, something visible must be done to stop such incidents. Exemplary action should be taken against those involved.
Former President of the Economics Association Moinul Islam told that CPD has talked about Tk 92 thousand crores. But the real picture is more dire. It is increasing. The reason for this is that the government has brought the debtors to light. The steps taken by the present finance minister have gone in favor of the defaulters. After he assumed office in 2019, the defaulters got concessions one after another. In particular, the policy has given a 10-year grace period for depositing 2 percent of defaulted loans. This is a very wrong policy. As a result of these policies, this situation has arisen today. And most of the defaulted loans have been smuggled abroad. They will never return to the bank. This is the reality. And this reality must be accepted.
CPD’s briefing mentions the need for major reforms in 12 specific institutions in the country. These include Bangladesh Bank, Bangladesh Securities and Exchange Commission (BSEC), Competition Commission, Ministry of Finance, Ministry of Labour, Bangladesh Export Promotion Authority (BEPZA), Labor Court, Industrial Police, Bank Association of Bangladesh, Border Guard Bangladesh, Expatriate Welfare and Ministry of Foreign Employment and Ministry of Commerce. But there is no hope of reform in the kind of elections the country is heading towards. As a result, the crisis will increase in the coming days. It is also time to reconsider interest rates and currency exchange rates.

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