‘Political govt essential for discipline in financial sector’

Prolonging a short-term government is detrimental to the economy, as it hampers investment and employment, said Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD).

To establish discipline in the financial sector, a political government formed through elections is needed, the economist said at a shadow parliament debate on bank mergers organised by Debate for Democracy at the Bangladesh Film Development Corporation on Saturday.

Khatun stated that the economy and politics run side by side, complementing each other. "Without proper politics, there can be no sound economy."

Speaking on freezing bank accounts, she said it is not right to indiscriminately freeze business people's bank accounts.

She suggested releasing the frozen accounts unless there are major irregularities, warning that otherwise the move could have a severe impact on trade, employment, and poverty levels.

The CPD executive director also noted that while some decline in economic indicators was prevented over the past year, the crisis has not been overcome, and poverty is not falling.

While discussing the banking sector, she said that there was no good governance in the banking sector during the previous government. "The situation was very poor in every indicator."

"More banks were approved based on political considerations rather than the actual size of the economy—something not seen anywhere else in the world. Banks were often used as tools for personal gain," she explained.

However, she opined that the interim government's efforts to merge weak banks are complex and risky. "There is a lack of clarity among people regarding this process."

Meanwhile, presiding over the event, Debate for Democracy's Chairman Hasan Ahmed Chowdhury Kiran said during the tenure of the Awami League-led government, some officials of Bangladesh Bank abused their power to provide unethical benefits to financial-sector mafias.

"At that time, the country was effectively under a 'mafia economy'. Several banks, including Islami Bank, were looted in front of everyone's eyes. Financial-sector mafias not only embezzled depositors' money but also laundered funds abroad," he said.

This has caused bank clients to live in anxiety, restlessness, and fear, he said, adding that it still remains uncertain when they will get their deposited money back. "Many depositors are even unable to withdraw funds kept in banks to cover medical expenses, and some have died in the meantime."

Kiran further stated that politically approved bank owners under the Awami League regime embezzled funds and looted all bank assets, both movable and immovable. "Currently, defaulted loans amount to Tk 6–7 lakh crore, which cannot be recovered. The mortgaged properties are so encumbered and complex that they cannot be auctioned or sold."

Moreover, since many of these properties belong to influential people, no one is interested in buying them, he pointed out.

The Government Teachers Training College, Dhaka won the shadow parliament debate, defeating the team from Southeast University.

The judges of the competition were Professor Tajul Islam Chowdhury Tuhin, senior journalist Mainul Alam, professional accountant Abul Bashir Khan, journalist Md Alamgir Hossain, and journalist Refayet Ullah Mirdha.