More than Tk 92,000cr embezzled in bank scams in 15yrs: CPD

Central for Policy Dialogue (CPD), a private research institute, today said that about 92 thousand 261 crore taka (Tk 92,261 crore) has been embezzled in 24 big bank scams during the Awami League government’s tenure and in the last 15 years from 2008 to 2023.

CPD informed this in a press conference titled ‘Banking Khate Sushashon Phiriye Ante Karaniyo’ (What can be done to restore good governance in the banking sector) on Monday (August 12).

CPD data shows that the amount embezzled in the last 15 years is “equivalent to 12 percent of the national budget or 2 percent of GDP” in the 2023-24 fiscal year.

At this time, the loan was mainly given due to “political considerations”, ‍said the agency.

The CPD has recommended the formation of a specific, timely, transparent, impartial, inclusive, and independent Banking Commission to bring transparency to the banking sector. It has also repeatedly called for the rescheduling of defaulted loans and the cancellation of loans.

Fahmida Khatun, executive director of the organization, said in the press conference that besides strengthening the commercial banks, the independence of Bangladesh Bank should be maintained and the integrity and availability of information should be ensured on time. 

“Banks on the brink of collapse should be allowed to close,” CPD said, noting that some banks were moribund, however, kept alive through “bailouts”. 

The CPD also said that the performance of several previously good banks had deteriorated after being taken over by “crony capitalists”. The management and board of directors of banks that are not on the verge of collapse but are still performing poorly should be removed, remarked the agency. 

Besides, the CPD said that the central bank has taken initiatives to merge weak banks with strong banks to improve the health of the financial sector and restore confidence. In this case, bank mergers should be done only after a proper audit to ascertain the true condition of the balance sheet of the weak banks.

Noting that the character of the board members of weak banks has been proved questionable, the CPD said that board members of commercial banks should be appointed based on merit and experience and not on political considerations.

The organization also demanded that every person involved in fraudulent activities should be investigated and brought under punishment.