No one takes responsibility for the failure in Bangladesh and the finance sector regulators are also no exception to this, but this failure has now brought a threat to the entire financial sector. The condition of many banks is now so bad that Bangladesh Bank has appointed its officials as supervisors and coordinators. There are 15 such banks, which are one-fourth of the total banks in the country. Despite this, the financial condition of most of the banks under the supervision of the Central Bank has deteriorated.
Mustafa K Mujeri, the central bank's former chief economist, has perhaps identified why the situation of weak banks is not improving. He told Prothom Alo several days ago that the owners and big customers of most of these banks are close to the government. So, the big question is what role Bangladesh Bank can actually play.
Padma Bank is going to voluntarily merge with EXIM Bank. Central banks said that if the banks do not merge voluntarily then the regulator will put pressure on them. However, officials did not release the names of the banks they want to merge. However, Governor Abdur Rauf Talukdar said that 10 banks are likely to be merged with other banks, and this figure represents one-sixth of the total banks in the country. That is, the Governor clearly admitted that the condition of a large number of banks is not good.
However, it is a big question whether the merger of banks will solve the ongoing crisis in the banking sector. Another big question is what action is being taken against those responsible for this crisis, and they could be the owners, management authorities or regulatory authorities. Businessmen are now demanding that they do not want to bear the liability of 'looted loan'. Those who looted or looted depositors' money do not face any punishment in this country. Banks will become bigger after merger, but it is important to know what steps are being taken to stop robberies there.
Farmers Bank Chairman Mohiuddin Khan Alamgir was offered a safe exit without any accountability and his successor and Padma Bank Chairman Choudhary Nafeez Sarafat was also given the opportunity to resign. Therefore, Padma Bank will remain a classic example of corruption and irregularities in the financial sector of Bangladesh.
This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Ashish Basu and Hasnul Banna.