Banks have sprung up like mushrooms across the country, but none, except the Bangladesh Bank, have managed to make a profit, Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russell said on Tuesday.
He made the remarks while addressing a discussion titled “Imperative for Central Bank Independence” organised by the Policy Research Institute (PRI) at a city hotel.
“The numerous banks established in the country were not set up based on necessity but on political considerations. This has increased the overall cost of funds in the banking sector,” Russell said.
“In the changed situation, after one side has fled, the additional cost of funds is now being shifted onto us,” he added.
In his keynote paper, Dr Ashikur Rahman said the main reason behind the lack of independence of the Bangladesh Bank is the Bank Company Act and the failure to enforce it.
“This has allowed family dominance in commercial banks, resulting in losses in the financial sector,” he said.
Pointing out that government intervention hinders the operations of the Bangladesh Bank, Ashikur said the control over the central bank’s appointments, budget, and board formation undermines its autonomy.
To make the central bank truly independent, the government must relinquish these controls, he added.
LND/SAE
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