We don't need experts to tell us banking sector is ruined
Â AS Bangladesh Bank has miserably failed to function properly, the country's banking sector is heading towards a total collapse and is being held hostage by a few individuals and entities. This remark comes from the local think-tank Centre for Policy Dialogue on Saturday marking the government's move for appointing a banking commission.Â CPD though did not mention anyone's name, rather it highlighted the huge amount of the non-performing loans and the liquidity crisis. The CPD, however, welcomed the plan for setting up banking commissions if it could save the ailing sector suffering from bad loans and irregularities. Presently, the defaulted loan shot up to Tk 1.16 lakh crore as of September 2019. Expressing optimism, CPD said that the proposed commission would be able to identify the groups who were holding the banking sector hostage -- the main problem in the financial sector.
What's true is that the unbelievable amounts of defaulted loans taken by the big shots have created tremendous negative impacts in every sector of the economy. The International Monetary Fund last month said the actual size of bad loans was more than double the officially recognised figure. People are losing interest in saving for which profit margins of banks have fallen drastically. On the other hand, the government has become apparently crazy to take away the people's money by any means for maintaining steady costs of mega projects and running the state machinery. Interest rates in postal and other saving schemes have been reduced to half and several barriers were imposed to discourage people from depositing hard cash. If this trend continues, the middle-income group people also would be encouraged to take away their money out of the country.
We're highly doubtful about the effectiveness of the proposed commission as most of the looted bank money has already been siphoned off to different foreign countries. It is almost impossible for Bangladesh Bank to bring back the money and chain up the looters as they are very close to the ruling high-ups. So appointing a commission is nothing but an eyewash.