A total of Tk 22,502 crore has been plundered from the country’s banking sector through major scams, irregularities and heists in the last one decade, according to a report of the Centre for Policy Dialogue.
The money is equivalent to 39 per cent of income tax collection in the fiscal year 2017-2018 or 78.2 per cent of the cost for Padma Multipurpose Bridge construction, says the report titled ‘Banking sector in Bangladesh: moving from diagnosis to action.’
Centre for Policy Dialogue on Saturday revealed the findings of the report at a dialogue on ‘what do we do with the banking sector of Bangladesh?’ held at Khazana Gardenia Banquet Hall in Dhaka.
At the seminar, economists, bankers and experts sought commitment in the election manifestos of political parities of not using the banking sector as a means of looting money, gaining illegal financial benefits and distributing financial advantages for political goals.
They also suggested that the political party which came to power should form an independent banking commission to bring out the sector from the crisis.
CPD said that the money from banking sector was lost through scams, irregularities and heists since 2008 from both from state-owned banks — Sonali, Janata and BASIC, seven private commercial banks — NCC, Mercantile, Dhaka, Prime, Jamuna, Shahjalal Islami, Premier, AB, NRB Commercial and the Farmers Banks, as well as from Bangladesh Bank.
The major scams include embezzlement of Tk 4,500 from BASIC Bank during the tenure of Sheikh Abdul Hye Bachchu as chairman of the bank, embezzlement of Tk 3,547 crore from Sonali Bank by Hallmark Group and some other companies, fraudulence by Crescent and AnonTex involving Tk 10,000 crore from Janata Bank and embezzlement and laundering of Tk 1,174 crore by Bismillah Group from
Janata, Prime, Jamuna, Shahjalal Islami and Premier Banks.
The report also includes reserve heists of Tk 679.6 from Bangladesh Bank treasury account with the New York’s US Federal Reserve Bank.
The report said that the sector had been suffering from massive scams, non-performing loans, redundant number of banks and cronyism in banking.
CPD recommended setting up an independent commission for addressing the emerging challenges.
It also suggested formulation a new exit policy for troubled banks and ensuring independence of the central bank.
CPD declared at the programme that it would form a citizen’s commission after the national polls to detect the problems and recommend the ways out.
Eminent economist and former adviser to a caretaker government Professor Wahiduddin Mahmud said that the country’s overall economy progressed much except the banking sector which regressed in terms of formulation of rules and regulations and compliance in recent years instead of moving forward.
Banking sector should not be used to patronise politics for giving political and immoral financial benefits to others, he said, adding that political parties should free the sector of irregularities, corruption and plunder.
Bangladesh Bank former governor Salehuddin Ahmed said that a huge crack developed in the banking system for lack of good governance and regulatory failure including lack of effective oversight of Bangladesh Bank and lax regulations.
Former deputy government of the central bank Khondkar Ibrahim Khaled said that the banking system reached the most vulnerable situation in recent years.
A governor should be appointed by the president based on the discussion in parliament, he said, adding that the government or finance ministry should not issue any instruction to the central bank.
CPD distinguished fellow, also chair of the dialogue, Debapriya Bhattacharya said that banking sector was the
heart of the national economy and it should be kept functional.
Political parties should keep the sector out of political interference and there should be specific commitments in election manifestos on carrying out reforms, framing new rules and regulations to bring discipline in the sector.
World Bank Dhaka office lead economist Zahid Hussain said that banking sector was
gradually becoming an extractive sector instead of inclusive one.
Farmers Bank managing director and chief executive officer Ehsan Khasru, Eastern Bank CEO Ali Reza Iftekhar, Bangladesh Institute of Bank Management director (training) Shah Md Ahsan Habib, former National Board of Revenue chairman Abdul Mazid, Dhaka University economics professor Abu Ahmed, among others, spoke at the meeting.
CPD executive director Fahmida Khatun presented a paper on the study report.
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