Bank looters will not be able to return under banking law: BAB
Photo: Agamir Somoy
Bangladesh's business leaders have expressed their concerns on the current crisis in the banking sector, stagnation in industrial production, and some recent changes in legal procedures.
Their concern was echoed in a meeting held between the Governor of Bangladesh Bank and a delegation from the Bangladesh Association of Banks (BAB), the organization representing bank owners, on Monday. The discussions covered policy decisions in the banking sector, the merger of weak banks, revival of closed industrial units, and financial support measures.
During the meeting, business leaders expressed their concerns on the current crisis in the banking sector, stagnation in industrial production, and some recent changes in legal procedure. The governor said under the bank regulation law enacted by the government, looters would not be able to return if all conditions are properly enforced.
Speaking to journalists after the meeting on Monday, BAB Chairman and Chairman of Dhaka Bank PLC Abdul Hai Sarker shared the details.
He said there was a special discussion on the new amendment to the Companies Act, particularly Section 18A. Bank owners expressed concern that through interpretation or application of this provision, some owners previously involved in irregularities in the banking sector might get an opportunity to regain control.
However, the governor clearly reassured them that under the current circumstances, there is no such scope. According to the bank regulation law, bank looters or those involved in irregularities cannot regain control of banks. He also clarified that the discussed provision is not currently in force.
The meeting also emphasized the revival of closed and sick industrial units. The governor said discussions were held on a special financial package of around Tk 40,000 crore to support this sector.
However, this support will not be open to all. Priority will be given to industrial units that have genuine business operations but are unable to continue production solely due to shortages of working capital.
Abdul Hai Sarker said that before providing assistance, each institution’s financial capacity, liabilities, business viability, and past performance will be rigorously assessed. Rather than offering blanket loans or incentives, the central bank is focusing on sustaining effective and potential industrial enterprises.
On the issue of merging weak banks, he said the governor clearly reaffirmed his position that the earlier decision to merge five weak banks remains unchanged and will be implemented according to the predetermined plan.
Regarding shortages of gas and electricity affecting industrial production, he said that due to the long-standing energy crisis, many industrial units are unable to operate at full capacity. As a result, production is being disrupted and business costs are rising.
Overall, representatives from the banking and industrial sectors presented various crises and concerns to the governor. While the governor assured that these issues would be considered positively, he stressed that strict scrutiny would be applied in any form of financial assistance.
