Central bank's governor Dr. Ahsan H Mansur said on Sunday the country's financial sector had made significant progress over the past 53 years but fallen short of its potential.
Speaking as the chief guest at the inaugural session of the golden jubilee celebrations of Bangladesh Institute of Bank Management (BIBM) in the city, he highlighted the sector's lack of progress, pointing to shared responsibilities that might not have been adequately fulfilled.
The governor emphasised the need for self-reflection and ethical awareness, noting that money could become a source of misfortune without integrity. "Banking requires not only experience but also honest, humane, and ethical bankers".
Mansur urged banks to align with international banking practices and prioritise sustainable and green financing.
He also noted that a significant amount of funds at the central bank remained untapped due to a lack of interest from commercial banks.
About green banking and financial inclusion, the governor stressed the importance of addressing new challenges, particularly climate finance.
"BIBM must focus on sustainable finance. Otherwise, the banking sector cannot move forward. Training in small and medium enterprise (SME) and green finance is essential, along with adopting eco-friendly practices," Mansur added.
Professor Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), stressed the urgent need for stricter measures to prevent wilful loan defaults, labelling it as a serious financial and ethical crime.
"Wilful default is not just a financial irregularity; it is theft and a crime. While non-performing loans (NPLs) may arise from genuine difficulties, wilful defaults are deliberate. We must establish a system so robust that no one dares to become a wilful defaulter," he said.
He made these remarks at the plenary session titled "Past, Present and Future of Banking."
BIBM Professor (selection grade) Dr Shah Md Ahsan Habib presented the keynote paper at the session chaired by Dr Toufic Ahmad Choudhury, former director general of the institute.
Professor Rahman also emphasised the need for better governance in the banking sector, highlighting its role in boosting agriculture, service, and IT-enabled sectors.
While 42 per cent of Bangladesh's workforce is engaged in agriculture, they contribute to only 12 per cent of the gross domestic product (GDP), reflecting low productivity, he said.
He urged banks to prioritise financing in high-potential areas, such as the service sector and IT-enabled industries, to ensure sustainable economic growth.
While presenting the keynote, Professor Habib expressed concern about the increasing corruption and financial crimes in the banking sector, particularly wilful loan defaults that undermine public trust.
"Loan defaults due to the misuse of depositors' money by major defaulters have created a ripple effect across the financial sector," he said, emphasising the urgent need for stringent measures.
He concluded that Bangladesh's banking sector needs a paradigm shift. "We must focus on transformation, not just reforms, to build a stable, robust, and sustainable banking sector. This requires the government's involvement, technological integration, and innovative financial solutions for broader financial inclusion."
City Bank Managing Director Mashrur Arefin highlighted the bank's collaboration with BIBM, noting the bank's staff received 17,028 hours of training in 2024.
"BIBM is not just a think tank; it is evolving with time, shaping skilled professionals and fostering corporate governance," he said.
BIBM Director General Dr Md Akhtaruzzaman reflected on the institute's 50-year journey, describing it as a memorable one.
He shared that BIBM had collaborated with international organisations like the International Federation of Accountants (IFAC) and the World Bank (WB), showcasing its capabilities through extensive research.
Professor Habib proposed several key strategies for governance and structural reforms, addressing loan defaults, combating money laundering, and supporting agriculture and SMEs.
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