TIB called upon the central bank to refrain from this “self-defeating” move and urged the government to consider TIB’s longstanding recommendation to form an independent commission to recommend a new national banking sector strategy, said a statement of TIB.
TIB Executive Director Iftekharuzzaman said, “We also call upon the government to acknowledge the deep crisis in the banking sector, and by shunning the denial syndrome form an independent banking sector reform commission so as to develop a national strategy to address the deepening crisis.”
“Loan defaulters, irrespective of identity or status, cannot be allowed to dictate terms to BB and cause non-compliance of its own policy-decision to get illegitimate extension of endless privileges of rescheduling, nor can BB allow itself to be held hostage and continue to accumulate ever greater risks to the sector. We call upon the central bank to have the courage to play its entrusted role in national interest and refrain from any such move,“ Dr Iftekharuzzaman said.
The TIB statement said the reported move by the central bank sets yet another extremely bad precedence and undermines its credibility.
It will open floodgates of further similar compromises and only deepen the ongoing crisis in the financial sector in general and banking sector in particular.
Iftekharuzzaman said, “We reiterate our call upon the Government to form a fully independent committee of experts consisting of reputed, independent and credible specialists to analyze the deepening crisis in the sector and recommend short, medium and long term strategy to address it, failing which the situation may become absolutely unmanageable causing the bubble of high growth to burst.”
According to media report published on September 13, 2019, the Bangladesh Bank is going to grant the above-mentioned rescheduling facility to Beximco Ltd which was earlier in 2015 granted an already unprecedented concession of similar rescheduling on condition that no further rescheduling would be applicable to this and other similar beneficiaries.
The central bank, according to the media report, is reneging on its own position apparently under pressure which is the last thing expected from a central bank of any degree of credibility, the statement said.