Executive Director of the Centre for Policy Dialogue (CPD) Dr Fahmida Khatun has said that Bangladesh Bank (BB) should stop printing money to provide liquidity support to troubled banks and proceed with a merger between strong and weak banks instead.
Acknowledging the challenge as a double-edged sword for the central bank, Dr. Fahmida emphasised that mergers and acquisitions are the ultimate solution to safeguard depositors' money.
She was speaking at a debate contest on 'Lack of good governance in the financial sector is the main challenge to combat corruption,' organised by Debate for Democracy (DfD) in the city's FDC premises on Sunday. Chairman of the DfD Hassan Ahmed Chowdhury Kiron chaired the programme.
Dr Fahmida, who was present as the chief guest, further said that there are several global examples where asset management companies take charge of weak banks and make it profitable.
"We need to streamline the process to encourage strong banks to merge with troubled ones," she said.
On recent tensions between Bangladesh and India, Dr Fahmida said Bangladesh is in an advantageous position in terms of trade imbalance where India exports much higher than Bangladesh imports.
However, the interdependencies stemming from comparative advantages may not put a long-term impact on the ongoing tensions, she said, citing examples of trade between China and India.
About the Adani power deal, Dr Fahmida suggested renegotiating the agreement as it was one-sided and signed defying public interest. Even officials from the Power Division now claim that they were unaware of the details of the agreement, she added.
Responding to a query on whether Bangladesh is going to fall into debt burden, Dr Fahmida said efficient use of loans may enhance capacity of loan repayment.
About bringing back stolen assets, Dr Fahmida said it is a difficult and lengthy task, but the int\erim government needs to pursue recover efforts through multilateral and bilateral deals.
She noted that as per the BB rules, any bureaucrats are not eligible to serve as BB governor, but it happened during the previous regime.
Dr Fahmida also alleged nepotism in awarding licences of the digital banks to incompetent individuals.
Speaking on the occasion, Mr Kiron said the burden of default loan could not be addressed until doomsday as the amount is so huge. About the Bangladesh-India tension, he said if it continues for a longer period, it would boomerang on India.
Southeast University won the competition defeating Bangladesh Textile University. Prof Abu Mohammad Rais, Prof Dr Tajul Islam Chowdhury Tuhin, and journalists -- Md Tawhidul Islam, Zakir Hossain and Doulot Akter Mala, adjudicated at the event.
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