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Monday, December 10, 2018

Poll pledges must focus solution to banking crisis

Kazi Zahidul Hasan :
Economists on Sunday said that political parties should have pledges in their manifestoes to overcome the current banking crisis and measures to contain bank money embezzlement and loan defaulters.
They said the banks have around Tk 100,000 crore in non-performing loans and at least Tk 22,000 crore was siphoned off by way of scams in recent years, sending the country's banking sector into deep trouble.
"The banking sectors is now on the brink due to lack of good governance, rising defaulted loans and financial scams. Political interference in loan approval and loan rescheduling is mainly responsible for the current state of the banking sector," Dr Mirza Azizul Islam, former Adviser to the Caretaker Government, told The New Nation yesterday.
He said all political parties should have the commitment in their election manifestos not to interfere in the core banking activities so that none can take shady loans with evil intention. Such a commitment can restore discipline in the country's banking sector, establish good governance and significantly contain default loans and scams.
Dr Mirza Azizul Islam also said that political parties should also have the pledge to stop 'connected lending' among bank directors, sponsors and their relatives. The central bank should be allowed to work independently to end the illegal lending practice.     
"Hundreds of cases remained pending in courts stalling recovery of thousands of crores of taka. Political parties should swear for streamlining the judicial system for quick disposal of the cases," he noted.    
Dr Mirza Azizul Islam observed the depositors to have lost their confidence in banking sector due to recurrence of big loan scams. Such occurrences took place with the nexus of dishonest bankers and corrupt people.    
"Strong actions against the dishonest bankers and scammers should be taken to bring back order in the banking sector as well as confidence of the depositors," he added.
"The whole banking sector is under stress and now it has become a big political and economic issue. All the political parties should chalk out specific pledges in their election manifestoes to get rid of the banking crisis," economists Dr Ahsan H Mansur told The New Nation.
To overcome the crisis, he said, the next government should establish full autonomy of the central bank, policy framework to acquisition and mergers of banks, reforms in laws to ensure speedy settlement of cases in Artha Rin Adalat and forfeit wealth of willful loan defaulters.       
He also said that political parties should also pledge in their manifestos not to interfere in the banking sector and not to approve more banks under political consideration.
"The country's banking sector is in its worst situation now. The political parties should properly focus the issue in their manifestoes considering interest of the people. They should carry out a through investigation on the current state of banks after elected in next polls," Khondokar Ibrahim Khaled, former Deputy Governor of the Bangladesh Bank, told The New Nation.
He said an intensive discussion should be held in the Parliament on the findings of the report so that the lawmakers can suggest appropriate measures to pull back the banking sector from the brink.
"All the political parties should take the banking crisis seriously, as it is a big public issues," he added.