The financial sector of Bangladesh is lacking in trust issues; hence, good governance is absent in this sector, which is adversely impacting the country’s overall economy, said economists at a discussion.
Good punitive measures and ensuring good governance can improve the financial sectors’ transparency and accountability, they have also suggested.
The suggestion came during a panel discussion, styled Transformation of the financial sector: Adapting to constraints, organised by the Economics Study Center in collaboration with the International Labour Organisation as a part of its three-day 5th Bangladesh Economics Summit 2024 at the Muzaffar Ahmed Chowdhury Auditorium of Dhaka University yesterday.
During the discussion, Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said compared to other neighbouring countries the domestic financial sector comprising banks, the stock market, the bond market, and the insurance sector is less developed
“The financial sector cannot support the real economy due to a lack of good governance,” he added.
The economist also said people have lost trust in the financial sector, and that is adversely affecting the overall economy.
“There is a lot of talk about reforms in the banking sector,” Mansur said, noting that while mergers and a decline in non-performing loans are anticipated, no concrete efforts have been made in this direction.
He disclosed that the proportion of problematic loans to total loans disbursed is approximately 24–25 per cent. This includes debt write-offs and repayments that are on hold until relevant court actions are dismissed.
