Approximately Tk 92,261 crore has been embezzled in 24 major banking scandals between 2008 and 2023, according to think tank Centre for Policy Dialogue.
The research organisation revealed the information at a press conference titled 鈥楤ringing discipline in the banking sector: things should be done immediately鈥� held in the capital on Monday.
Its executive director Fahmida Khatun in a presentation highlighted that the embezzled amount equals 12 per cent of the national budget for the fiscal year 2023鈥�24 or 2 per cent of GDP.
The think tank criticised the banking sector for operating beyond regulatory control, alleging that Bangladesh Bank had favoured certain individuals and groups.
Referring to a report published in 抖阴精品 on聽 November 30, 2022, the Centre for Policy Dialogue mentioned that Chattogram-based S Alam Group established its control over seven banks, having taken away Tk 30,000 crore from Islami Bank alone.
Islami Bank, once reputable, turned to become a beleaguered institution following the takeover by the S Alam Group.
The think tank also pointed out that Janata Bank violated single-borrower limits by lending Tk 10,000 crore to AnonTex Group, raising concerns about the availability of funds for other customers.
The organisation warned of an erosion of public trust in the banking sector, citing a 710 per cent increase in default loans, which surged to Tk 1,82,295 crore in March 2024 from Tk 22,481 crore in 2009.
The Centre for Policy Dialogue called for immediate action, including freezing their bank accounts and liquidating their assets, against wilful defaulters, while it also recommended for temporary nationalisation of their businesses.
Organisation executive director Fahmida Khatun emphasised strengthening of commercial banks, upholding the independence of Bangladesh Bank, and ensuring timely access to accurate information.
Fahmida criticised past governors for favouring vested interest groups by either disregarding existing rules or altering them to benefit certain entities over the last 15 years.
She called for structural reforms in the banking sector, urging accountability for those involved in financial misconduct.
Having criticised the central bank for not raising interest rates to control inflation, she said that instead the bank prioritised the interests of specific business groups.
The policy organisation also recommended halting the repeated rescheduling and write-offs of non-performing loans, while arguing that several banks were 鈥榗linically dead鈥� and were artificially sustained through bailouts.
It suggested shutting down banks on the brink of collapse, as continuing bailouts would only waste taxpayer money.
Additionally, it proposed replacing the boards and management of underperforming banks to see if they could be managed effectively.
The think tank called for the establishment of an independent, transparent, and politically driven banking commission to reform the sector, anticipating resistance from vested interests.
It also urged increasing the number of judges handling cases under the Financial Loan Court Act 2003 and Bankruptcy Act 1997 to expedite the resolution of loan default cases and reduce backlogs.
It also said that the banking sector was currently operating under a dual administration.
Organisation鈥檚 distinguished fellow Mostafizur Rahman questioned the existence of the Financial Institutions Division that was in control of the central bank, arguing that Bangladesh Bank should be autonomous and answerable to the parliament.
Saying that the Financial Institutions Division should be dissolved, Fahmida Khatun stated that its creation conflicted with the central bank鈥檚 independence.
Mustafizur Rahman, organisation鈥檚 research director Khondaker Golam Moazzem, and senior research fellow Towfiqul Islam Khan, among others, were present at the event.