THE observation by a leading economist of the country at a seminar in the capital Dhaka on Saturday that corruption and lack of skills in the state-owned commercial banks are not only holding back their growth compared to their private-sector counterparts but also ‘affecting the overall banking sector’ indeed deserves attention of the authorities concerned. According to a report published in New Age on Sunday, he also attributed all this to ‘political influence’ that has virtually ruled the state-owned banks over the years. Besides, he urged the government to ensure that none get loans from the state-owned banks using political influence.
It is beyond debate that, with an extensive network of branches spread out all over the country, which has been developed over the decades in exchange for huge public resources, the state-owned banks have all along been supposed to play a pivotal role in a balanced growth of the economy including bridging the yawning gap between urban and areas. It has become all the more so, especially, in the backdrop of the expansion of the private banking sector, generally fond of pursuing aggressive banking, over the recent years. Regrettably, however, since their inception, the state-owned banks have largely failed to live up to such expectations mainly due to unabated mismanagement, coupled with rampant corruption and irregularities.
Studies are there that the key factors behind all this include politicisation of the management of these banks along partisan lines. Meanwhile, despite huge criticism on the part of experts and conscious sections, the incumbent government has continued with this harmful trend. Reports have it that it has placed a number of leaders of the ruling Awami League in the management of the state-owned banks who are out to sanctions loans, that too in large amounts, on partisan consideration. In addition, like their predecessors during the previous regimes, they seek to use the loopholes in the relevant banking rules and regulations to defend the latter in case they default on loans. As a result, with a huge sum of classified loans, the state-owned banks have already been outpaced by the private banks in terms of doing business.
It may be pertinent to mention here that, in a bid to make the state-owned banks competitive, a host of measures have been taken in the past few decades of which turning the state-owned commercial banks into public limited companies is the latest. It cannot, however, be denied that all these have failed to deliver thus far apparently due to the same reasons. Hence, the government needs to pay heed to the call in question without any delay.