Despite being the most sensitive sector for an economy, the banking sector in Bangladesh has been left uncontrolled and unprotected, said Wahiduddin Mahmud, a noted economist and former finance adviser to the caretaker government.

He made the comment at a discussion on the proposed budget for the FY 2024-25 organised at a hotel in the capital by The Editors' Council and the Newspaper Owners' Association of Bangladesh (Noab).

Hossain Zillur Rahman, executive chairman of the Power and Participation Research Centre, Salehuddin Ahmed, a former governor of the Bangladesh Bank, Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, and Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), also spoke at the event.

They expressed deep concerns over the current situation in the banking sector of Bangladesh and warned that the recovery from the current economic crisis would not be possible without addressing the sector's vulnerability.

Wahiduddin Mahmud said there is no confidence in banks now. Although the Bangladesh Financial Intelligence Unit (BFIU) has been established, it is not functioning. As a result, money laundering is happening outside the country. Black money is being created.

He said, “We are gradually moving towards an unethical economic situation. We talk about making smart Bangladesh, but there is no economic policy. Corruption and irregularities are major issues, stemming from the political nature of power. To alleviate the crisis, certain sectors need to be kept free from political influence even from those in power. Regardless of some partys' political influences and interests, economic issues should be addressed. Political power should be kept away from certain economic matters to ensure integrity.”

He also said, several fault lines have been visible for quite some time. One of the weaknesses is low revenue collection. "Reform in this area has been neglected," he said, adding that the dependence on borrowing from local and foreign sources remains.

"If this continues, there is a risk of the budget falling into a debt trap," he said, adding that there is a widespread waste in public expenditure. A long-term plan is needed to overcome the current economic crisis, he added.

BDST: 1908 HRS, JUNE 10, 2024
MSK