The Centre for Policy Dialogue (CPD) has urged the interim government to form an independent 'Banking Commission' for the sector to bring transparency and regain people’s trust through measures for improving the situation sustainably.

The CPD said this at a press conference on the banking sector held CPD's office in Dhanmondhi on Monday.

Executive Director of CPD Dr Fahmida Khatun said  about Tk 92,261 crore was embezzled in 24 major banking scams in a period between 2008 to 2023.

She gave a presentation on default loan in banking sector along with suggestions for remedy as an interim government led by Nobel Prof Muhammad Yunus sworn in following the fall of Sheikh Hasina government.

Several banks are clinically dead but have been kept alive through bailout, she said and recommended giving go-ahead to close down banks that are on the verge of collapse.

"Several previously good banks have experienced a misfortune decline in their performance after hostile takeovers by crony capitalists," said Dr Fahmida.

The embezzled  amount is equivalent to 12 percent of Bangladesh's national budget of 2023-24 fiscal year or 2 percent of the country's gross domestic product (GDP) for the FY2022-23, said CPD.

The CPD said the banking sector, a vital pillar of the economy, suffers from vulnerability over time manifested through high loan defaults.

Regrettably, the previous government did not keep its commitments to safeguard the banking sector expressed in various policy documents and election manifesto.

There has been an erosion of public trust in the banking sector due to the continuous deterioration of the health of the sector and inadequate measures taken by the policymakers of the former government, said CPD.

Sporadic measures were not successful since the nature and depth of the problemrequire comprehensive due diligence and structural reforms, it observed.