Tk 922b siphoned off from banking sector: CPD

A staggering Tk 922.61 billion has been illicitly siphoned off from the banking sector in the previous 15 years from 2008. The sum accounts for more than 12 per cent of the last national budget and can easily address the prevailing budget deficit.

The Centre for Policy Dialogue (CPD) came up with the observation in a media briefing in Dhaka on Saturday.

According to the CPD, the funds were extracted through 24 instances of irregularities in both public and private banks, as reported by mainstream media outlets.

Fahmida Khatun, the executive director of CPD, briefed the media about the prevailing economic crises and probable ways out, while distinguished fellow Mustafizur Rahman, research director Khondaker Golam Moazzem, and senior research fellow Towfiqul Islam responded to the media queries.

Th think tank observed that various metrics, including non-performing loans, of the banking sector witnessed a steady downtick throughout the last 15 years. The amount withdrawn from the banks during the period approximates 2 per cent of the country’s current Gross Domestic Product (GDP).

A newsman sought to know about the amount that was injected into the economy after looting from the banks and the amount that was laundered abroad. In response, the CPD executive director said she does not have any specific data in this regard and the central bank does not disclose any information.

However, it is believed that a portion of the fund has been reintroduced into the economy, while the remaining portion has been laundered abroad, she added.

The CPD research director said the economic fragility is deteriorating gradually, and the banking sector, one of the four key sectors of the economy, plunged into a state of disorder.

Restoring macroeconomic stability emerged as the biggest challenge for the political leadership, which requires a substantial institutional framework. But there is a lack of necessary political or electoral systems. Hence, it is a matter of question if there will be any reforms in the economy even after the election.

Fahmida Khatun expressed concerns about the domination in the country's banking sector by private interests and attributed the deteriorating crisis to this dominance.

She also said the giant borrowers wield influence in shaping rules for loan rescheduling. Not only the banking sector but also other state institutions are now hostage to vested quarters. Hence, the reforms are a matter of doubt.

Mustafizur Rahman underscored the growing economic disparity due to high inflation and warned about the emergence of a dual economic system in the country.

“Discrimination is turning acute in the country due to high inflation. We are once again heading towards a dual economic system in the country, though Bangabandhu fought against the particular economic system,” he said.

The distinguished fellow stressed the just allocation of wealth to contain the discriminatory economic system.