Bangladesh’s banking sector stands riddled with corruption, with a staggering 922.61 billion taka looted through major loan scams since 2008.
This alarming figure, revealed by the Centre for Policy Dialogue (CPD), exposes the sector’s dire state and detrimental economic impact.
Hall-Mark Group’s embezzlement from Sonali Bank, BASIC Bank’s tk 45 billion scams, and Islami Bank’s recent 23.20 billion taka heist represent just a glimpse into the systemic rot.
Beyond these headlines, defaulted loans skyrocketed from tk 220 billion in 2008 to a staggering tk 1560.40 billion today. Even this figure underestimates the true extent of the problem, as bad loans masked in special accounts, court injunctions, and rescheduling remain rampant.
This crisis plagues both state-run and private banks. Excess liquidity, once brimming at tk 1695.56 billion, has dwindled due to liquidity woes in poorly governed Islamic banks following ownership changes.
Capital flight further complicates the picture. Experts estimate $7-$8 billion vanishes from Bangladesh annually, potentially including siphoned bank funds.
The recent Bank Company Act amendment extending director tenures to 12 years starkly opposes experts’ calls for a six-year limit. Cronyism thrives, with vested interests utilizing regulators and framing policies to their advantage.