Published on 12:00 AM, June 13, 2017

Recapitalising government banks with taxpayers' money

The government has put aside Tk 20 billion from the budget for the state-owned banks and a private commercial bank. But this earmarked amount comprises the common taxpayers' money. How reasonable is it to inject capital this way into banks that are suffering from capital shortfall, with our money? This capital shortfall in financial institutions is a result of management inefficiency and lack of good governance. For the past several consecutive years, the government has been injecting taxpayers' money to replenish this capital shortfall. It plans to do so again this year. For how much longer will the government continue to provide capital for financial institutions that continue to engage in wrongdoing and inefficiency? Instead of repeating the same mistake ceaselessly, the authorities should help identify the real issue. If it is management failure that is occurring repeatedly, then the banks should be reorganised into a better structure.