Struggling banks must regain public trust

The recent liquidity support of Tk 2.65 billion extended to three struggling banks under the Bangladesh Bank's credit guarantee scheme brings to light the prolonged liquidity crisis in banking sector. While this initiative aims to stabilise cash flow issues, the recurring need for such interventions raises serious concerns about the underlying health of the banking sector.

The total liquidity injection of Tk 68.5 billion in recent months highlights the scale of the crisis. However, such measures can only provide temporary relief unless broader structural reforms are implemented to address governance issues, non-performing loans, and inefficiencies. Transparency in disbursing funds and strict monitoring of weak banks' performance are crucial to ensuring the effectiveness of these efforts.

It is imperative for policymakers to focus on sustainable reforms to restore public trust and ensure long-term stability in the sector. Without decisive action, the reliance on financial bailouts risks becoming a norm, undermining the sector's growth prospects.

Jaiyed Hossain

Dhaka

[email protected]