Setting up of a Banking Reforms Commission has become imperative to reform the banking sector and monitor activities of the commercial banks, including the state-owned banks, to make sure that they are working purely on the basis of banking ethics and business calculations.
Lack of good governance in the banking sector led to serious disasters in the recent past. The recent disclosure of serious scams in the state-owned banks and their crippling effect on the overall banking sector, in which thousands of crores of taka have been swindled by vested interest groups with support from the ruling party bigwigs, has surprised many people including eminent economists, bankers and experts of the country.
The Hall-Mark group has alone swindled more than Tk.2,500 crore from Ruposhi Bangla branch of Sonali Bank out of a total of over Tk.3,600 crore swindled from the branch by five other business houses.
Newspaper reports further disclosed that such swindling has taken places in almost all other state-owned banks and the scandalous banking transactions may have involved over Tk.10,000 crore. This is for the first time that such huge organised swindling of bank money has taken place in the country.
Bangladesh Bank cannot disown its responsibility for the above incidents. Definitely, there was lack of proper supervision, monitoring and follow-up by Bangladesh Bank. Bangladesh Bank, being the central bank and the custodian of monetary management, unfortunately has totally failed to perform as watchdog. Otherwise, it would not have been so easy to misappropriate such a huge amount from the state-owned banks by vested interest groups. On the other hand, overall control of the state-owned banks by the Banking and Finance Division of the Ministry of Finance made the matter more critical. Political appointment of managing directors/CEO and the Board of Directors of the state-owned banks is also responsible for it.
The banking sector of our country has advanced significantly in the last two-three decades, but it is lagging behind in establishing good governance and monitoring system.
In a seminar held at Dhaka recently, former Bangladesh Bank Governor Dr. Salehuddin Ahmed demanded the scrapping of the Banking and Finance Division of the Ministry of Finance, so that the central bank can act independently without political intervention from the government in running the state-owned banks. Bangladesh Bank should be given more autonomy for looking into the overall management of the banks, but transparency must be ensured.
As such, for building a more transparent and responsible banking sector, formation of a Banking Reforms Commission is urgently needed. The Commission may deliver better results and may work on reforming the banking sector and finding out how to protect business from politics.
In view of what has been stated above, a Banking Reforms Commission comprising of four members may be constituted immediately.
An independent, neutral Search Committee comprising of eminent bankers and economists may also be constituted to appoint managing directors and the Board of Directors of the state-owned banks, so that the Committee can do the job without political intervention from the government.

The writer is a former senior banker.