Former official warns Bangladesh faces bank plunder after rules relaxed

Bangladesh's banking sector risks repeating previous mistakes unless political interference stops and ethics are restored, according to the Daily Star. Wahiduddin Mahmud, a former planning adviser to the interim government, raised the warning today during the 11th Annual Banking Conference at the Bangladesh Institute of Bank Management in Dhaka. [1]

The troubles in the sector stem mainly from excessive relaxation of rules over the last 15 years, the Daily Star reported. Mahmud stated that the sector was initially ruined by loan defaults, but it now faces a culture of bank plunder after 2010, which he described as even more dangerous because money is being taken directly. [1]

Mahmud added that regulation alone will not work without ethics among bankers and businesses, the Daily Star reported. Bangladesh, classified as a developing country, faces ongoing challenges in its banking sector, particularly regarding services and customer care at state-owned banks. [1][5]

The warning follows recent distress in the country's financial system. As FTMQ Business reported earlier, state-owned Sonali Bank provided a short-term liquidity loan of Tk 7,000 crore at a 10 percent interest rate to National Bank, backed by a central bank guarantee, to help handle customer withdrawals. [9]