Commenting that Bangladesh Bank has lost its independent entity, the executive director of CPD Fahmida Khatun, a private research institute said. Fahmida Khatun said, the central bank is not able to take decisions keeping its spine straight. More emphasis is being given to implementing externally imposed decisions.
The executive director of CPD said these things in the speech as the chief guest at the Shadow Parliament debate competition organized by Debate for Democracy on Saturday (May 18) at FDC, Dhaka. Chairman of Debate for Democracy Hasan Ahmed Chowdhury Kiran presided over the event.
Fahmida Khatun said that the culture of transparency and accountability is being lost in various regulatory agencies including the central bank. As a result, the institutions are not able to fulfill the responsibilities assigned to them.
She said, currently the anarchy in the banking sector has reached such a level that the decision to merge the banks has to be taken on the advice of the IMF. However, due to lack of prior preparation, integration has been challenged. Forced bank mergers may not be sustainable.
She also said that the banking sector has lost its ability to support the overall economy due to lack of good governance. People have lost faith in the banking sector. The central bank cannot provide any guarantee to keep the deposits in the bank safe. As a result, there has been concern among depositors. Those responsible for the hemorrhaging of the banking sector remain untouchable. People are not able to know the correct information about defaulted loans of banks.
In the speech of the President, Chairman of Debate for Democracy Hasan Ahmed Chowdhury Kiran said, loan fraud, loan default, money laundering are the biggest black spots in Bangladesh's financial sector. By misappropriating the money of the bank, the comfort and luxury of the individual has taken the form of a cancer in the country's economy. Instead of treating this cancer of the financial sector, Bangladesh Bank has started the process of merging weak banks with strong or good banks. We will have to wait for a few more days to know whether it will bear fruit or not.
He also said that Bangladesh Bank cannot avoid the responsibility of instability in the country's financial sector. Banks have become family institutions with various legal benefits. A lack of good governance and accountability has pushed financial institutions to the brink. Therefore, political will is very important for the efforts being taken to overcome the ongoing crisis through the process of bank consolidation.