The financial sector is one of the most important parts of any economy. But our banking sector is unfortunately one of the worst managed sectors in the country. Defaulted loans in the sector have been constantly on the rise because of poor regulatory practices, corruption, political interference, etc.
According to one daily newspaper, as of June this year, the amount of non-performing loans stood at Tk 955 billion which is 10.78 percent of all total outstanding loans in the sector. If written off loans are added in, the amount would actually go up to Tk 1,252 billion.
This constant rise in non-performing loans has literally crippled the banking sector of our country. The public's trust in the banking sector has already greatly eroded.
In the meantime, the sector has suffered from liquidity crisis. And to address this, the government has eased many regulations which some say may end up deteriorating the situation even further. It is time for the government to listen to financial experts. Such mismanagement of the sector cannot be allowed to continue.
M Soman, Dhaka University