Banking Companies (Amendment) Act-2017 | The Daily Star
12:00 AM, November 27, 2017 / LAST MODIFIED: 01:12 PM, November 27, 2017

Editorial

Banking Companies (Amendment) Act-2017

A disaster in the making

A parliamentary body recently recommended the passing of the Banking Companies (Amendment) Act-2017, which would allow for the number of directors in a bank's board from a single family to double and extend the tenure of directors. We believe that such a move risks concentrating banks' decision-making powers onto even fewer hands and, thus, endangers the wellbeing of the sector and the economic health of the nation in general.

Over the last several years, our banking sector has continually been a hindrance, at a time when other sectors of the economy have done well. Had that not been the case, it is very likely that Bangladesh's economic performance would have been much better.

Despite repeated assurances to address the rapidly increasing non-performing loans, the government still has nothing to show for—defaulted loans again increased by Tk 6,159 crore to Tk 80,307 crore in September compared to the figure a quarter ago. And yet the government continues to downplay allegations and reports of widespread corruption and nepotism taking place in the sector. Amidst all of this, why the government would consider passing an act which would increase chances of greater monopolisation of the banking sector escapes us. 

We have already witnessed numerous instances where banks based their lending decisions on connections, rather than on solid business credentials. This has led to turmoil in the sector, the burden of which the government has time and again pushed onto taxpayers. By passing the proposed amendment, the government would simply risk increasing the already existing problems that predictably arise from the concentration of power in the hands of the few.

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