President Mirza Fakhrul Islam Alamgir has urged bank owners and senior bankers to take responsible measures to restore public confidence in Bangladesh’s banking sector and rebuild its reputation.
He made the call on Thursday when a delegation of the Bangladesh Association of Banks (BAB), led by its Chairman Abdul Hai Sarker, met him at Bangabhaban in the afternoon.
President’s Press Secretary Md Sarwar Alam briefed journalists after the meeting.
The delegation included chairmen, managing directors and chief executive officers of 26 state-owned and private banks, bringing together senior representatives from across the banking industry.
During the meeting, the President said people had spent years struggling to establish democracy and good governance, while large sums of money had allegedly been siphoned out of the country through the banking system with the backing of influential quarters.
He said these developments had left the banking sector extremely fragile. All stakeholders, he stressed, must act responsibly to overcome weaknesses in the economy and financial system and rebuild confidence among customers and the wider public.
Public trust is particularly significant for banks because depositors rely on financial institutions to safeguard their savings, while businesses and entrepreneurs depend on them for credit, payments and other financial services. A weakening of confidence can therefore affect the wider flow of economic activity.
The President also said that no political figures were being appointed as directors of banks under the current government. He expressed hope that the initiative would contribute to preventing irregularities in the banking sector.
CSR funds urged for social development
Mirza Fakhrul called on bank owners to use corporate social responsibility (CSR) funds for projects that can provide wider benefits to society.
He suggested using such funds to establish technology and engineering education institutions, hospitals and colleges, as well as for social development and human welfare initiatives.
The President also urged banking leaders to ensure credit facilities for new and young entrepreneurs. He called for greater encouragement of investment in innovative sectors, including agro-processing industries.
Access to finance can be particularly important for new businesses that need capital to develop products, purchase equipment or expand operations. By encouraging lending to emerging entrepreneurs and productive sectors, banks can play a broader role in supporting economic activity.
Bankers highlight default loan concerns
During the meeting, BAB leaders described the banking sector as a major driving force of the country’s economy. They also outlined several problems that they said had weakened the sector.
The delegation said thousands of crores of taka had turned into default loans after powerful groups siphoned money from banks in the past. They described the failure to protect depositors’ interests as “humiliating” for the banking industry.
Default loans can affect the ability of banks to recover funds and provide fresh financing. Responsible lending, effective recovery mechanisms and stronger protection for depositors are therefore closely linked to the overall stability of financial institutions.
The BAB leaders also told the President that only around 30 per cent of the country’s total financial transactions were conducted through banking channels. They stressed the need to promote the digital economy and introduce QR code-based transactions.
A broader shift towards digital payments could increase the use of formal financial services and make transactions more convenient for customers and businesses. The bankers’ proposal placed particular emphasis on expanding technology-based financial transactions.
Calls for wider access to banking services
The delegation also raised the need to increase employment in the banking sector and expand bank branches to village-level areas.
Extending banking services to rural communities can help more people access formal financial facilities, while a wider branch network can make it easier for customers outside major urban centres to carry out basic banking activities.
The BAB leaders also called for maintaining the existing rules governing paid-up capital and dividend payments. They stressed the need to ensure law and order to support the smooth operation of banks and businesses.
The delegation briefed the President on the current problems, challenges and prospects of the banking sector.
The meeting brought several issues into focus, including restoring public confidence, protecting depositors, addressing default loans, expanding digital transactions, supporting young entrepreneurs and improving access to banking services in rural areas. The President urged bank owners and bankers to work collectively and responsibly to strengthen the sector and regain the trust of customers and the public.