BB responsible for worse state of banking sector

Monirul Alam of DOT
Bangladesh Bank (BB) cannot shun responsibility for the persistent worse state of banking sector that is being criticised over huge bad loans and poor governance, a former Governor has said.
Talking to Daily Our Time, Dr Salehuddin Ahmed said the missing thing is ‘Monitoring and Supervision’ of the central bank that worsened the banking sector.
“BB cannot avoid responsibility for lapses of monitoring on banks to verify genuineness to the key indicators provided in financial statements from time to time. This lapse of monitoring has consequent to worse state of banking sector,” Dr Salehuddin said.
“However, Bangladesh bank can help banking sector regain financial strength by initiating appropriate monetary policy and its implementation by constant monitoring and supervision,” he added.
The BB will announce half-yearly monetary policy for January-June period on January 30.
Dr Salehuddin said the unstable banking sector represents weak regulatory intervention.
In his course of speech, he was referring to high non-performing loans, sluggish growth of credit to private sector, liquidity crisis, unfavorable interest rate, government’s borrowing from banking system and exchange rate issues.
He said the central bank needs to act strictly to make banks compliant with regard to policy matters.
“Otherwise, the goals of the monetary policy will not be achieved,” he said.