Banking sector to be brought under reform commission: Information minister

Banking sector reform, change and repair will be brought under a commission, Information and Broadcasting Minister Zahir Uddin Swapon said today (7 June). 

"When commissions have been formed for media, anti-corruption and administrative reforms, why should an important sector like banking remain outside reform? We will do it," he said while speaking as chief guest at a seminar titled "Good Governance in the Banking Sector and the Role of Media," organised by the Economic Reporters Forum (ERF) at its office in Paltan, Dhaka. 

Swapan said good governance in the banking sector cannot be seen in isolation.

"Discipline cannot be restored in the banking sector through media oversight alone unless good governance is ensured in the overall state and political system," he said.

The minister alleged that state statistics had been used as a political tool in the past.

He said the real situation was hidden through data distortion and manipulation.

"Such changes in data or performance-related statistics would not have been possible without state patronage," he said.

Referring to the development of the country's economy, Swapan said the private sector has expanded following the economic liberalisation initiated by former president Ziaur Rahman.

The information minister also called for strengthening the capital market to reduce dependence on banks as a source of financing.

He alleged that those who embezzled bank deposits also misappropriated money from small investors in the stock market.

United Commercial Bank (UCB) Managing Director Mohammad Mamdudur Rashid said the banking sector is very important in the country's economic and social reality, but it has faced several crises due to a long-standing lack of good governance.

"UCB is also under financial pressure," he said.

Mamdudur said actual default loan figures had remained hidden for a long time.

Following Bangladesh Bank instructions, the real default loan situation has become visible, he said.

"This is not a picture of deterioration in one year. It is a reflection of the reality over a long period," he said.

The keynote paper said the banking sector remains the main source of financing in the country.

As the capital market and bond market have not been able to play their expected role, most short-, medium- and long-term financing is still done through the banking system.

The paper said the overall stability of the economy is closely linked to good governance in the banking sector.

It also said the media plays an important role as the "fourth pillar" in ensuring good governance and preventing corruption.

However, governments often try to silence the media instead of accepting constructive criticism positively, the paper said.

The keynote paper was presented by Samakal Special Correspondent Obaidullah Rony and Prothom Alo Senior Reporter Sanaullah Sakib.