A staggering Tk92,261 crore has been embezzled from the banking sector in Bangladesh over the past 15 years, amounting to 12% of the national budget for the fiscal year 2023-24, according to the Centre for Policy Dialogue (CPD). This revelation was made during an event titled "Bringing Discipline in the Banking Sector: What Should be Done Immediately," held on August 12.

During the event, the CPD highlighted the erosion of public trust in the banking sector, citing the continuous deterioration in the sector's health and the inadequate measures taken by previous policymakers. Fahmida Khatun, the CPD's executive director and keynote speaker, presented a series of recommendations aimed at addressing these issues.

The CPD's recommendations include strengthening commercial banks, ensuring the independence of Bangladesh Bank, creating a supportive legal and judicial environment, and maintaining the integrity and availability of timely data. The organization also pointed out that credit-worthiness is often judged based on political connections rather than financial stability.

The report also revealed concerning statistics on loan rescheduling, with only 33% recovery for first-time rescheduled loans and 30% for loans rescheduled three times. The CPD urged a permanent halt to the practice of repeated rescheduling and write-offs of non-performing loans (NPLs).

Furthermore, the CPD identified several banks as being "clinically dead" and recommended that these banks be allowed to close down. On the issue of embezzlement, the organization called for thorough investigations and accountability for all individuals involved in fraudulent activities.

The CPD also expressed concern over the concentration of control by a single corporation over more than seven private commercial banks, suggesting that such practices should be prohibited. To expedite the resolution of loan default cases and reduce the backlog, the CPD recommended increasing the number of judges handling cases under the Financial Loan Court Act 2003 and the Bankruptcy Act 1997.

Distinguished Fellow Prof Mustafizur Rahman, Research Director Khondaker Golam Moazzem, and Senior Research Fellow Towfiqul Islam Khan, among others, were present at the briefing.