Hold the elite to account

It seems that the government has, finally, woken up to the fact that certain powerful groups have been allowed to abuse the country's banking sector to the point of running it to the ground. Prime Minister Sheikh Hasina has now called for an investigation into S Alam Group, which has been accused of violating banking rules, manipulating the banking system and misrepresenting the value of their assets for the purpose of excessive borrowing. 

One of the largest conglomerates in the country, S Alam Group has been at the centre of a storm of controversy after they were alleged to have borrowed more than Tk 30,000 crore from Islami Bank, even though rules dictate it cannot borrow more than Tk 215 crore. This is only one of eight banks that this group has stakes in – an astounding number that reflects its outsized influence – and we dread to think how much more has been extracted from the banking system through its abuse of power.

While we commend the authorities for this investigation, we cannot help but remind them that S Alam Group is perhaps the most dramatic symptom of a malaise that has brought the financial sector to its knees. The fact that the amount of default loans has multiplied by 29 in 32 years – from Tk 4,646 crore in 1990 to Tk 134,396 crore today – illustrates just how long this disease has been choking the system. 

We cannot accept that this entire time, the government was unaware that the banking system has been under siege from powerful quarters – both financially and politically. However, not only did it fail to implement measures to protect public interests, but it has bent over backwards to create space for defaulters and money launderers to continue to manipulate the system at will. 

What is truly astounding is just how upfront this manipulation has been. Rules have been changed to allow family members on boards, loans have been continuously rescheduled, and a culture of cronyism has not only been normalised, but converted into a perverse show of power. 

The current state of affairs reflects how much the oversight functions of Bangladesh Bank has been eroded as well. Either the central bank is not aware of its duties, or it has surrendered them to political groups. And if it continues to fail to address such decades-long irregularities, it will not become difficult to argue that it has become functionally irrelevant.

It is interesting to note that even after Singaporean media outlets wrote on S Alam Group's purchases in the city-state worth millions of Singaporean dollars, all the while having huge amounts of loans in Bangladesh, no government authority investigated, or even commented on, these discrepancies. What does that say about our political will to deal with this rot in our system? 

For too long, a culture of impunity and a "rules are there to be broken" attitude has suffocated the country's banking sector. Powerful business groups have made a mockery of the system, leading to the decline of the financial sector and putting our entire economy at risk. We hope this investigation into S Alam Group is a sign that the government will finally acknowledge its dangerous lapse of accountability in the financial sector and prioritise the people over the country's politically-connected elite.