There has been a recurrent call to form a banking commission to stop irregularities in the sector and infuse a sense of discipline. However, the uncertainty over the formation of the banking commission lingers.
Fellow for the Centre for Policy Dialogue, Dr. Mostafizur Rahman, said, “To form a commission, political pledge is needed.”
In February 2017, the then-finance minister, Abul Maal Abdul Muhith, declared the formation of the banking commission.
But, two and a half years later, the commission has not been formed as yet. Muhit’s successor AHM Mustafa Kamalhas indicated to the formation of a commission.
He said, “We have not noticed any notable reforms in banking so far; if a loan taker failed to pay back the money there wasn’t any chance for that person to obtain an exit; we are taking steps to formulate an effective insolvency law and bankruptcy law; this will facilitate an exit.”
We will take steps after deliberation with all sides, the minister confirmed.
Former adviser to the caretaker government, Dr. Mirza Azizul Islam said, “Everyone knows the problems of the banking sector and the solutions; several suggestions were made but to no avail.”
If the government has genuine desire then reforms can be carried out without a commission; without the willingness to reform, a commission won’t make any change, he contended.
Meanwhile, CPD fellow, Dr Mostafizur Rahman, observed: a financial specialist should be the head of the banking commission.
According to him, the commission will:
1. Put a cap on default loan;
2. Ensure independent operation of the central bank;
3. Work to recover wilful and non-wilful default loan;
4. Work to recover the money;
5. Reform the legal structure;
6. Identify default loan and other problems;
7. Formulate policy for forming a bank board;
8. Work to change law;
9. Provide advice to improve governance in the banking sector.
“To restore confidence in the banking sector, this initiative has to be taken,” added the CPD fellow.
This commission will be for six months after which it will give a report to the government along with recommendations and a guideline for their implementation, added the fellow.