TIB for amending laws help establish family system in banks
The Transparency International Bangladesh (TIB) on Tuesday recommended forming an independent banking commission with experts to reform the sector plagued by rising defaults and widespread irregularities, reports news agency UNB.
At a virtual press conference, ‘Banking Sector Supervision and Default loans Control: Good governance problem of Bangladesh Bank and way of overcome’, the organisation also suggested ensuring exemplary punishment to those involved in irregularities and corruption in the preparation and implementation of investigation reports.
Other recommendations are – amending Banking Companies Act-1991, giving Bangladesh Bank full power to control and supervise state-owned banks, formulating specific policy regarding appointment and removal of board members, governors and deputy governors of the central bank, specific instructions regarding the formation of recruitment inquiry committee, duties and responsibilities, and recruitment process.
TIB executive director Iftekharuzzaman said Bangladesh Bank has turned into an ineffective institution to control defaults loan
It also recommended increasing the number of private representatives (concerned experts such as financial sector and good governance) in place of three government officials in the Board of Directors of Bangladesh Bank and amending or repealing all the sections in the banking related laws which are against the interest of the depositor and conducive to the establishment of family system in the banking sector.
TIB also suggested forming a panel through an inquiry committee to appoint directors of all commercial banks including that of the state-owned, and from there provision should be made for the appointment of directors of various banks. Provisions should be made to prevent persons directly involved in politics from becoming bank directors and loans to bank directors should be approved through direct supervision of Bangladesh Bank, it said.
Rules should be made to keep provision against defaulted loans suspended by the court; repeatedly rescheduling and restructuring the list of people who have frequently defaulted will have to be published.
Increase the number and duration of bank visits, vacancies in the departments directly involved in the inspection should be filled immediately, inspection report should be completed within reasonable time and its recommendations should be implemented and even if limited, the inspection team should be given the power to take immediate decision and take action on the inspection.
TIB executive director Iftekharuzzaman said Bangladesh Bank has turned into an ineffective institution to control defaults loan.
“So, our 10 recommendations can be considered before forming the independent banking commission to reform the sector,” he said.
Iftekharuzzaman added there is a weakness in the central bank. He blamed the lack of leadership for the existing situation in the banking sector.