The commission will report only to President: GEF
Abu Sazzad: Experts have stressed the need for forming an ‘Independent Banking Commission’ (IBC) immediately to reduce the financial grafts and irregularities as well as to bring back discipline in the banking sector.
Strong political commitment is a must to create the ‘Independent Banking Commission’, which would help to increase the financial sector contribution to country’s Gross Domestic Product (GDP) and economy.
The widespread financial irregularities are posing a constant threat for the steady growth of the country, but formation of ‘Independent Banking Commission’ would check the financial irregularities and bring back discipline in the banking sector.
The country’s financial sector especially the banking had facing problems since long. So, the government will have to undertake effective steps to minimise its ongoing crisis and the formation of IBC will be an effective policy to this end.
In this backdrop, in July last year, the Financial Institutions Division revived a move left unfinished by former Finance Minister AMA Muhith to form a banking commission.
Later, in a rule on February 13 last, the High Court asked the government and the Bangladesh Bank to explain why they would not be directed to form an independent commission to identify loan defaulters and money launderers.
A senior official of Finance Division said on secrecy that recently, the Finance minister AHM Mustafa Kamal declared to form such commission, but it is delaying for the negative impact of virus pandemic.
Global Economist Forum (GEF) President Dr Enayet Karim recommended for forming an independent banking commission which would be free from any political allies or any ministry.
Actually, every active commission is formed under the supervision of any ministry which is hampering to bring the fruitful outcome in Bangladesh, he lamented.
The proposed banking commission will report only to President of the country to get the effective benefits related with financial irregularities, recommended the GEF president.
He expressed his deep concern for squeezing the financial stability of the banking sector, affecting expansion of the private sector and employment generation in the country. The government had failed to properly handle the banking sector, threatening the overall success, claimed the GEF president. “Currently, the banking sector is facing multifarious challenges including financial irregularities, weak management, poor governance, lack of strong leadership”, said Enayet Karim.
Apart from this, the banking sector is facing various challenges including higher NPL, capital and provision shortfall and money siphoning. He laid emphasis for forming an independent banking commission to minimize the ongoing challenges of the banking sector and better financial services for the nation.
Former Bangladesh Bank Deputy Governor Ibrahim Khaled claimed that the finance minister Mustafa Kamal is protecting the interest of the big borrowers and loan defaulters. He expressed his doubt on the independent power exercise of the banking commission to make the right recommendations for the banking sector. Delay in forming the banking commission is encouraging the vested groups to grab the public money through talking the huge amount of large-scale loans from the financial institutions as well as weakening the financial health of the banking sector, he added.
Dr Mirza AB Azizul Islam, a former finance adviser to a caretaker government and a number of think-tanks have been demanding for a commission since long, but the government did not take any visible move until last year.
Distinguish Fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya said, banks are running with the highest amount of NPLs, poor private sector credit growth, lower net profit, provisioning of the highest amount of classified and non-classified loans, the Bangladesh Bank’s (BB) reserve heist, and liquidity crisis and so on.
“The bad debt has increased significantly which is foiling the financial stability of the banking sector, so, the authorities concerned should undertake specific and effective steps to recover the money”, he added.
The formation of an independent banking commission would help reducing the corruption and irregularities from the banking sector, but strong political commitment is needed in this regard, he added.