NEWS report in The New Nation said quoting banking experts that since the condition of the country’s state-owned banks is rapidly deteriorating, it is time the government should think to hand over those banks to private sector. They have mainly held reckless misconduct of senior bank officials and inefficiency of bank management for the poor state of these banks when most of them are surviving on regular budgetary bail out to keep their window open. Most banks like Sonali, Agrani, Rupali and BASIC Banks have lost much of their working capital over the past several years. They were subject to massive swindling by powerful people in and around the government. They arranged big loans on fake business projects and most of such projects are not traceable at the moment. Others are holding huge defaulted loans and avoiding the repayment through undue loan rescheduling for longer years. It is too big that out of Tk 60,000 crore defaulted loans Tk 32,000 alone belong to state-owned banks.
Even Finance Minister AMA Muhith on Saturday said he was highly worried about the condition of the state-owned banks and he seems to be utterly disappointed as he has to allocate regular recapitalization fund to avoid closure of some banks. It appears that when the government is spending taxpayers money to beef up banks capital, powerful people are exploiting banks to their advantage. It can’t go unabated for long when banks are commercial organization and that should survive earning profit and not functioning like charities. So former bankers believe that such banks must be set free to private ownership to survive by competition with other banks. Finance Minister recently said banks have witnessed sea level theft and since the government is not capable to stop the theft, experts believe it must relinquish control over those banks.
We know that big business houses robbed Sonali Bank and Chairman of BASIC Bank made it empty. Agrani Bank Chief Executive was sacked last week for granting loans in questionable circumstances. The list is hefty that led many to think that privatization of state-owned banks might prove effective at the end. Experts suggestion that privatization of Sonali Bank, the largest one in public sector, may be on card while retaining others in public hand may make sense. But question also arises as to whether sales of such banks would be sustainable for the economy and whether the government can manage a fair deal protecting public interest.
In our view a ‘banking commission’ is the need of the hour as experts suggested to bring the banking sector back to order and their management at competitive level. Two things are important: banks must be held accountable and governance must be transparent to ensure their corporate functioning.
