THE country’s banking sector is sinking into deeper crisis as per media report. Most state owned banks have already lost their working capital and private banks are now moving toward that direction. Directors of such banks are using them as family business and most money is moving out of the country.
Only safety of depositors’ money is at stake forcing the government to recapitalize public sector banks to keep them in business. Finance Minister AMA Muhith on Thursday agreed that the situation is almost out of control.
Highlighting the plight, Swiss National Bank in its latest annual report for 2016 said Bangladesh nationals’ deposits in Swiss banks rose by 20.18 percent year-on-year in 2016 to 661.96 million Swiss Francs or Tk 5,575 crore. Deposits by Indian nationals dropped to 664 million Ffrancs last year from 1.2 billion Francs during this period. Capital flight from Bangladesh is regularly taking place to major global business hubs where businessmen are buying real estates and setting up new business.
The open secret is that most money in Swiss Bank accounts was deposited using cleaver mechanism to hedge its source of origin. Needless to say powerful people within the ruling establishments – be it now or in the past – are laundering the country’s banks to amass illegal wealth. As per Washington based research organisation Global Financial Integrity (GFI) report capital flight from Bangladesh stood between $6 billion and $9 billion in 2014 alone. The truth is – money is regularly flying out but the government is failing to stop it and there is no serious attempt to stop it either.
This is a dangerous situation that exposes the entire banking sector almost totally unprotected when clever and powerful people are moving out money from the country. The Finance Minister made no secret in Parliament saying the government has no option but to recapitalize state owned banks to avert major disaster in the banking sector. “The entire country may collapse if there is a disaster in the banking sector,” he said, as he stood helpless to face the challenge.
Meanwhile, family members of bank directors of private banks are robbing money in bad loans after public banks have been looted of their capital. As four members of a director’s family can now sit on the board. They are taking away loans on fake projects that may not be recovered later on.
The situation has worsened at such length that immediate actions are needed to put a brake to exploiting banks and laundering money from them to save the banking sector from falling apart. The country’s wealth must be protected to use it for development – to set up new business, create new jobs and make the country prosperous. We must say the government must effectively address the poor governance in the banking sector and stop using political consideration to granting loans. Time is running out to save the banking sector from chaos.
Only safety of depositors’ money is at stake forcing the government to recapitalize public sector banks to keep them in business. Finance Minister AMA Muhith on Thursday agreed that the situation is almost out of control.
Highlighting the plight, Swiss National Bank in its latest annual report for 2016 said Bangladesh nationals’ deposits in Swiss banks rose by 20.18 percent year-on-year in 2016 to 661.96 million Swiss Francs or Tk 5,575 crore. Deposits by Indian nationals dropped to 664 million Ffrancs last year from 1.2 billion Francs during this period. Capital flight from Bangladesh is regularly taking place to major global business hubs where businessmen are buying real estates and setting up new business.
The open secret is that most money in Swiss Bank accounts was deposited using cleaver mechanism to hedge its source of origin. Needless to say powerful people within the ruling establishments – be it now or in the past – are laundering the country’s banks to amass illegal wealth. As per Washington based research organisation Global Financial Integrity (GFI) report capital flight from Bangladesh stood between $6 billion and $9 billion in 2014 alone. The truth is – money is regularly flying out but the government is failing to stop it and there is no serious attempt to stop it either.
This is a dangerous situation that exposes the entire banking sector almost totally unprotected when clever and powerful people are moving out money from the country. The Finance Minister made no secret in Parliament saying the government has no option but to recapitalize state owned banks to avert major disaster in the banking sector. “The entire country may collapse if there is a disaster in the banking sector,” he said, as he stood helpless to face the challenge.
Meanwhile, family members of bank directors of private banks are robbing money in bad loans after public banks have been looted of their capital. As four members of a director’s family can now sit on the board. They are taking away loans on fake projects that may not be recovered later on.
The situation has worsened at such length that immediate actions are needed to put a brake to exploiting banks and laundering money from them to save the banking sector from falling apart. The country’s wealth must be protected to use it for development – to set up new business, create new jobs and make the country prosperous. We must say the government must effectively address the poor governance in the banking sector and stop using political consideration to granting loans. Time is running out to save the banking sector from chaos.
