B Mirror Report : Considering the ground reality, only 10 to 15 banks are sufficient for Bangladesh, said Bangladesh Bank Governor Dr. Ahsan H. Mansur. At the same time, he said the government plans to reduce the number of state-owned banks to two and merge the rest.
He said, “There are currently 61 banks in the country, which is far more than necessary. Considering the reality, 10 to 15 banks are enough for Bangladesh. Reducing the number of banks will make it easier to ensure good governance. The government’s plan is to keep only two state-owned banks and merge the others.”
The governor made these remarks on Wednesday (January 21) while speaking as the chief guest at a discussion titled ‘Banking Sector: Current Challenges and Future Prospects’ at the central auditorium of Jagannath University. The Vice-Chancellor of Jagannath University, Professor Dr. Rezaul Karim, was present as a special guest.
At the event, Governor Ahsan H. Mansur said that the country’s banking sector has virtually been destroyed due to corruption, irregularities, nepotism, and the lack of good governance.
He stated, “Because of these factors, around Tk 3 trillion has flowed out of the banking sector, a large portion of which was probably laundered abroad.” He also alleged that USD 20 to 25 billion was siphoned off through family-based control and nepotism.
He warned that personal, individual-centered decisions must not be allowed to influence the banking sector under any circumstances. “The sector has been pushed to the brink due to the absence of proper governance. There are many areas where reforms are needed in the banking sector, and reforms are essential in all of them,” he said.
The governor expressed hope that the default loan ratio would come down to 25 percent by next March. However, he cautioned that political interference in the banking sector could return in the future if the amended Bangladesh Bank Order is not issued.
He also informed that Bangladesh Bank is working to establish a Bank Resolution Fund, through which Tk 300–400 billion will be raised. Not only banks, but non-bank financial institutions will also be brought under this resolution framework.
Emphasizing the importance of building a cashless society, the governor said, “Cash transactions are the main channel for tax evasion. If a cashless system is introduced, it will be possible to collect an additional Tk 1.5 to 2 trillion in revenue annually.”
To this end, he urged that every student be brought under banking services.
In his speech as a special guest, Vice-Chancellor Professor Dr. Rezaul Karim said, “The role of the current governor is crucial in moving a nearly devastated sector forward. The fragile condition of the banking sector is now clearly visible.”
He expressed hope that the sector is being revived through various initiatives and that the positive trend of improvement will continue.
At the event, Chairman of the Department of Economics Professor Dr. Sharif Mosharraf Hossain said, “Everyone is aware of the current situation of the country’s banking sector. As the default loan rate has increased, banks have reduced lending, which in turn is hampering investment.”
He also commented that the banking sector will need to be brought under stricter monitoring in the future.
