CPD calls for winding up moribund banks, not wasting taxes

The Centre of Policy Dialogue (CPD) has called for closing the operation of several moribund banks rather than wasting tax money.

Several third and fourth generation banks that received licenses during the Awami League government terms on political consideration are in a moribund state. They cannot operate and have been kept alive on tax money. Since they are wasting money, they should be closed down, CPD executive director Fahmida Khatun said.

She made the call at a media briefing titled ‘Bringing discipline to the banking sector: What should be done now’ in Dhaka on Monday.

Fahmida Khatun said a few other banks are also performing poorly and if would collapse of they faced further shock. So, an attempt can be carried out by changing their board of directors and management to make them function again.

CPD distinguished fellow Mutafizur Rahman and research director Khondaker Golam Moazzem also addressed the event. Speakers also showed respect to the people who were killed and injured in the student movement against discrimination and expressed condolence to their families.

According to the CPD, the entire banking sector was in disarray as Bangladesh Bank has long worked for a certain section of people and groups. The banking sector saw 24 big scams involving Tk 922.61 billion in the past decade.

CPD also recommended forming a bank commission to identify problems and solve them. The think tank said dual administration functions in the banking sector and the finance institution division under the finance ministry should be closed down in addition to stopping the practice of issuing bank licences without any consideration.

CPD said Chattogram-based S Alam Group owns seven banks and the conglomerate alone took Tk 300 billion from Islami Bank Bangladesh Limited, which use to be among the better banks, but became feeble after the takeover. Besides, Janata Bank gave AnonTex Group Tk 100 billion overstepping the lending ceiling. So, if a single client receives this huge amount, what other clients receive would then.

Regarding the independence of the Bangladesh Bank, Fahmida Khatun said it is not like that the central bank does not exercise freedom rather Bangladesh Bank formulated policy considering the interest of a vested quarter. It was necessary to raise interest rates to control inflation, but Bangladesh Bank did not do so to serve the purpose of a certain business group, she added.

Replying to a query on appointing boards at banks and other financial institutions following the closures of the financial institutions division, Fahmia Khatun said the finance division will carry out these tasks.