The banking sector of Bangladesh is passing through a challenging time. Since internal mismanagement, systematic corruption, abuse of power and accountability deficit became common in this sector, it started to witness large-scale scams.
These scams affected public confidence, which is considered an essential component of a healthy banking system. On 14 July 2018, Bangladesh Bank’s former governor Fazle Kabir, while addressing a conference, said that ‘mistrust over the banking sector is an ominous sign.’
Recently, the High Court Division while hearing a case involving embezzlement by bank officials remarked that ‘the biggest crimes were taking place in the banking sector and such crimes crippled the country’.
These two remarks came four years apart, from two different institutions, but they point to the same issue. While the judiciary has commented on the criminal element that dragged the banking sector to a critical state, the former governor reflected on its effects.
This article briefly focuses on the public confidence crisis in the banking system of Bangladesh and suggests some measures that stakeholders may consider to improve the situation.
The source of banks’ financial strength is the deposits of customers. Banks offer different schemes to attract customers and collect money from them. The two main things these schemes offer depositors are the monetary reward against deposit and safe custody of the money deposited.
Banks utilise these deposits to create…
