Bangladesh Association of Banks (BAB) has strongly demanded the swift identification and legal recovery of embezzled and looted funds from the banking sector to protect the interests of ordinary depositors.
Welcoming the proposed national budget for fiscal year 2026-27, the apex body of private commercial bank owners, stated that merely recapitalising weak banks will not make the financial sector sustainable in the long run unless past irregularities and financial plundering are effectively resolved.
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Abdul Hai Sarker, Chairman of BAB issued a post-budget statement following the presentation of the national budget in parliament.
The government has allocated approximately Tk 40,000 crore for weak banks, which it termed a crucial step toward restoring stability in the banking sector.
However, the association emphasised that to reap the actual benefits of this recapitalisation, the immediate recovery of looted assets must be ensured simultaneously.
Strengthening banks with public money can only be successful when those who abused these funds are held strictly accountable, BAB added.
The organisation further stressed that visible and punitive actions against those responsible are imperative to rebuild depositors' trust.
"Legal action must be taken against willful defaulters and those who have crippled the banking system. Under no circumstances should they be allowed back into the financial sector," the statement reads, adding that such steps would not only restore financial discipline but also deter future irregularities.
As part of comprehensive banking sector reforms, BAB highlighted the necessity of forming an effective Asset Management Company (AMC).
Such an institution could play a pivotal role in reducing non-performing loans (NPLs) of weak banks and strengthening their balance sheets, it said.
BAB also called for clear and transparent policy formulation regarding the management and disposal of shares and assets acquired through illicit financial irregularities.
Warning of potential long-term risks, the association cautioned that if the recovery process is not executed effectively, bailouts using state funds will only offer temporary relief without yielding the desired structural results.
It urged the government to implement a tripartite approach focusing equally on "Reform, Recovery, and Accountability" alongside the recapitalisation process.