Staff Reporter :
Finance Minister AMA Muhith on Thursday told the Parliament that country’s banking sector is in a vulnerable state.
“Country’s banking sector would face big risk, if proper steps were not taken on time. However, various steps have already been taken to avert the risk,” he said while replying to questions raised by six lawmakers in the Parliament.
He said a total of 58 banks are now running their financial activities in the country.
Following the proposal mooted in the House by the Finance Ministry for the parliamentary approval of appropriation fund Tk 53, 833.80 crore for meeting necessary development and non-development sectors of the Economic Relations Division (ERD), Muhith said.
The opposition and independent lawmakers proposed a total 352 cut motions, but they only spoke on the motions for six demands for grants, which were rejected by voice votes.
The Finance Minister claimed that the government had worked for the money market and banking sector with sincerity and honesty in the last eight years.
“As we have taken some steps, including reforms on the banking sector, people will be able to see the good result immediately,” he said.
He said 80 percent business is run by the private sector while the government controls only 20 percent.
“As the government fails to do well in the business, it refrained from doing so,” he said.
The Finance Minister said the government has subsidised banks to save them from financial disasters.
The government has given out Tk 20 billion in subsidy to state-owned banks and other financial institutions to make up their capital deficit, according to media reports.
The amount comes from the revised budget of outgoing fiscal 2016-17. Sonali Bank, Rupali Bank and BASIC Bank have received Tk 14 billion (70 percent of the total fund).
Most MPs from the opposition Jatiya Party spoke against the subsidy in the Parliament on Thursday.
Different quarters are also critical of the government for bailing out state-owned banks this way, which they claim are in shambles due to corrupt practices and loan forgery.
“It is being said that the government is subsidising the banks for no good reason. But we are doing so to save the sector which is currently in a vulnerable state,” Muhith said.
Jatiya Party lawmaker Nurul Islam Milon said directors are looting the banks.
Independent MP Rustom Ali Forazi lambasted the recent trend of appointing banks directors following family legacy and called on the government to stop the practice by forming a bank commission.
Echoing him, Kazi Firoze Rashid from the opposition said: “Banks have turned into family businesses. Both public and private banks are being looted.”
To these comments, Muhith highlighted the Banking Companies Act which doubles the number of directors in a bank’s board from a single family and extends the tenure of shareholding directors.
“A parliamentary committee is vetting the act. We are waiting for its decision,” he said.
