Over Tk 92,000cr embezzled from banks in Awami years

About Tk 92,261 crore was embezzled in 24 major banking scams between 2008 and 2023, , equivalent to 12% of the national budget for FY24, according to the Centre for Policy Dialogue (CPD) at an event held today (12 August).

The event, titled “Bringing Discipline in the Banking Sector: What Should be Done Immediately,” highlighted the growing erosion of public trust in the banking sector, driven by its continuous deterioration and the inadequate actions taken by the previous government’s policymakers. Fahmida Khatun, the executive director of CPD and the keynote speaker, outlined a series of recommendations to address these issues.

The CPD called for the strengthening of commercial banks, the upholding of Bangladesh Bank’s independence, the creation of a conducive legal and judicial environment, and the assurance of integrity and availability of timely data. The organization also pointed out that creditworthiness in the banking sector has often been assessed based on political affiliations rather than financial soundness. It noted that the recovery rate for rescheduled loans was 33% for first-time rescheduling and only 30% for loans rescheduled for the third time.

The CPD urged a permanent halt to the repeated rescheduling and write-offs of non-performing loans (NPLs) and recommended that banks deemed “clinically dead” should be allowed to close. On the matter of embezzlement, the CPD stressed the need for thorough investigations and accountability for all individuals involved in fraudulent activities.

Additionally, the CPD raised concerns about a single corporation gaining control of more than seven private commercial banks, stating that such concentration of power should not be permitted. To expedite the resolution of loan default cases and reduce the backlog, the CPD recommended increasing the number of judges handling cases under the Financial Loan Court Act 2003 and the Bankruptcy Act 1997.

The briefing was attended by CPD Distinguished Fellow Prof. Mustafizur Rahman, Research Director Khondaker Golam Moazzem, Senior Research Fellow Towfiqul Islam Khan, among others.