Corruption in Banks: TIB calls for forming expert committee

Transparency International Bangladesh yesterday called for formation of an expert committee to combat irregularities, corruption and risks in the banking sector.

The anti-graft body expressed grave concern over what it called an anarchy and collusion of fraudsters in the sector.

TIB Executive Director Iftekharuzzaman in a press statement said the committee should be formed of independent and impartial individuals.

He urged the government to prepare and implement a complete and time-befitting guidelines based on the committee's recommendations.

There is no alternative for the government, especially Bangladesh Bank, to solving the crisis and bringing good governance to the sector, he said.

A section of people in the authorities took ad hoc measures to stop unbridled forgery, corruption and institutionalisation of defaults on loans.

By ignoring the actual problems and showing a lack of foresight, they created a dip in confidence and anarchy unprecedented in the banking sector.

Although the BB took some steps in the wake of crises in the highly controversial Farmers and NRBC banks, it failed to unearth the specific causes behind the irregularities and ensure punishment for those responsible.

That is why the irregularities became unbridled, dipping the depositors' confidence, he said.

The TIB statement said the risk of institutionalising an uncontrolled and non-transparent dynasty has arisen in the banking sector through a recent amendment to the company act.

Lawlessness in the sector will not stop unless the vested quarters, organisations and unscrupulous persons, who want to amass wealth quickly, are not brought to book.

TIB emphasised increasing skilled manpower, ability and purview of the authorities concerned, including the BB, to bring discipline in the banking and financial sector. It also called for modernisation of the institutions.

The government needs to show political commitment and courage to ensure an environment where the controlling authorities can work without any obstructions, the statement read.

TIB also called for refraining from taking ad hoc measures in the absence of necessary legal and policy guidelines.  It also urged the government to cancel the amendment of relevant bank law.

The government in May approved a proposal to amend the Banking Companies Act, doubling the number of directors in a bank's board from a single family and extending the tenure of share-holding directors.

The amendment is awaiting parliament approval.