Thursday, 21 November, 2024
Finance Adviser Dr. Salehuddin Ahmed reaffirmed Tuesday that no banks in Bangladesh will be shut down, despite ongoing challenges in the sector, including rising non-performing loans (NPLs).
Addressing a press conference at the Bangladesh Secretariat, he highlighted the government's commitment to stabilizing the banking system and restoring public trust.
Dr. Salehuddin, also the former governor of Bangladesh Bank acknowledged the bad loan crisis but noted that some banks, including Islami Bank, are showing signs of recovery.
"We’re trying, and corrections are being made in the banking sector. Islami Bank is on the path to recovery. The interim government has no intention of closing any bank," he said.
The Finance Adviser emphasised that safeguarding depositors' interests remains a priority. "The goal is to stabilize the banking sector and ensure that depositors feel their money is secure," he said.
Dr. Salehuddin assured that honest businessmen and taxpayers have no reason to worry.
"Those who repay their loans and pay taxes properly will face no problems. However, those who exploited loopholes in the past are the ones fearing accountability now," he added.
The country's banking sector has been under scrutiny as bad loans have surged to record levels in recent years, threatening the stability of financial institutions. Experts have pointed to weak governance, political interference, and inadequate regulatory oversight as key contributors to the NPL crisis.
Finance Secretary Dr. Khairuzzaman Mozumder, Economic Relations Division Secretary Shahriar Kader Siddiky, National Board of Revenue Chairman Md. Abdur Rahman Khan and Financial Institutions Division Secretary Nazma Mobarek also attended the press conference.
The interim government has pledged to implement reforms to reduce NPLs, strengthen bank management, and enhance regulatory supervision to restore confidence in the financial sector.
Bangladesh now has the highest ratio of non-performing loans in South Asia with nearly 17 per cent of the country’s total loans categorised as defaults, which, according to experts, could have far-reaching consequences for the country’s financial sector.
The volume of loan defaults in Bangladesh’s banking sector surged to Tk 2.85 lakh crore in September, marking a sharp increase of Tk 73,586 crore within just three months.
Experts attribute this alarming rise—up from only 1.9% in 2011—to decades of mismanagement, regulatory laxity, and widespread corruption. This growing mountain of non-performing loans (NPLs) has severely impacted the sector’s ability to lend, reducing credit flow to vital industries and stunting overall economic growth.
Once loans turn sour, banks face the crippling reality of recovering neither the principal nor the interest, effectively draining their financial resources.
Experts suggest that the current banking crisis is largely a result of fraudulent practices under the ruling Awami League government. Massive sums were siphoned off from banks through anonymous accounts, manipulated financial records, and frequent loan rescheduling—all tactics designed to conceal loan defaults and perpetuate financial misreporting.
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Finance Adviser Dr. Salehuddin Ahmed reaffirmed Tuesday that no banks in Bangladesh will be shut down, despite ongoing challenges in the sector, including rising non-performing loans (NPLs).
Addressing a press conference at the Bangladesh Secretariat, he highlighted the government's commitment to stabilizing the banking system and restoring public trust.
Dr. Salehuddin, also the former governor of Bangladesh Bank acknowledged the bad loan crisis but noted that some banks, including Islami Bank, are showing signs of recovery.
"We’re trying, and corrections are being made in the banking sector. Islami Bank is on the path to recovery. The interim government has no intention of closing any bank," he said.
The Finance Adviser emphasised that safeguarding depositors' interests remains a priority. "The goal is to stabilize the banking sector and ensure that depositors feel their money is secure," he said.
Dr. Salehuddin assured that honest businessmen and taxpayers have no reason to worry.
"Those who repay their loans and pay taxes properly will face no problems. However, those who exploited loopholes in the past are the ones fearing accountability now," he added.
The country's banking sector has been under scrutiny as bad loans have surged to record levels in recent years, threatening the stability of financial institutions. Experts have pointed to weak governance, political interference, and inadequate regulatory oversight as key contributors to the NPL crisis.
Finance Secretary Dr. Khairuzzaman Mozumder, Economic Relations Division Secretary Shahriar Kader Siddiky, National Board of Revenue Chairman Md. Abdur Rahman Khan and Financial Institutions Division Secretary Nazma Mobarek also attended the press conference.
The interim government has pledged to implement reforms to reduce NPLs, strengthen bank management, and enhance regulatory supervision to restore confidence in the financial sector.
Bangladesh now has the highest ratio of non-performing loans in South Asia with nearly 17 per cent of the country’s total loans categorised as defaults, which, according to experts, could have far-reaching consequences for the country’s financial sector.
The volume of loan defaults in Bangladesh’s banking sector surged to Tk 2.85 lakh crore in September, marking a sharp increase of Tk 73,586 crore within just three months.
Experts attribute this alarming rise—up from only 1.9% in 2011—to decades of mismanagement, regulatory laxity, and widespread corruption. This growing mountain of non-performing loans (NPLs) has severely impacted the sector’s ability to lend, reducing credit flow to vital industries and stunting overall economic growth.
Once loans turn sour, banks face the crippling reality of recovering neither the principal nor the interest, effectively draining their financial resources.
Experts suggest that the current banking crisis is largely a result of fraudulent practices under the ruling Awami League government. Massive sums were siphoned off from banks through anonymous accounts, manipulated financial records, and frequent loan rescheduling—all tactics designed to conceal loan defaults and perpetuate financial misreporting.
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