B Mirror Report: Economists, former bankers and depositors on Saturday warned that continued instability in Bangladesh’s banking sector could seriously damage the overall economy unless urgent reforms are implemented.

Speaking at a seminar in the capital, they stressed the need to restore public confidence in the financial system and expressed concern over recent amendments to the Bank Resolution Act, saying controversial provisions could further weaken trust in the sector.

The seminar, titled “Disaster in the Country’s Banking Sector in the Perspective of the Islamic Banking Sector: Its Impact on the National Economy and the Way Out,” was organised by the Bank Customer Forum at the CIRDAP auditorium in Dhaka.

Former caretaker government adviser Hossain Zillur Rahman, attending as chief guest, said the banking sector was facing a severe crisis that could eventually affect the entire economy.

“There is no debate that the banking sector is in disaster mode. The whole economy is stagnant, and key economic indicators are not improving,” he said. “If the banking crisis remains unresolved, economic collapse cannot be prevented.”

He criticised certain provisions of the new Bank Resolution Act, questioning why opportunities were being created for individuals allegedly responsible for past banking irregularities to return to the sector.

“Those who played a major role in creating the crisis appear to have been given room to come back. This has raised serious concerns,” he said.

Rahman also highlighted the growing difficulties faced by depositors who are unable to withdraw their savings from troubled banks. He called for faster implementation of a special relief fund for affected depositors.

Badiul Alam Majumder, editor of Citizens for Good Governance (Sujon), said widespread irregularities and alleged looting in the banking sector inevitably harm the broader economy.

“The most important foundation of banking is trust,” he said, urging the government to ensure the independence of Bangladesh Bank and revise disputed sections of the Bank Resolution Act.

Former FBCCI Vice-President Abul Kashem Haider also addressed the event, while Mizanur Rahman presented a keynote paper alleging irregularities surrounding the takeover of Islami Bank Bangladesh PLC.

Former Trust Bank Managing Director Faruk Moinuddin said meaningful reform in the banking sector would not be possible without strong political commitment.

Participants at the seminar also proposed preserving records of alleged banking scandals at the July Museum and called for explanations from intelligence agencies and government bodies linked to the takeover of Islami Bank.