Why should the banks be blamed alone?
Sunday, 16 September 2007
The central bank, according to a report published in this daily, in line with the assurance given at the recent discussion between the top government functionaries and the businesses on the national economy, particularly on the prevailing business climate, would ask the commercial banks not to ask their clients too many questions about the sources of funds for imports. The Bangladesh Bank governor is likely to convey the message to the chiefs of banks at the bankers meeting, due today.
This particular issue came up for discussion at the government-business dialogue and the banks were criticised for enforcing certain rules and regulations that they had ignored in the past, thus creating a sense of panic among the businesses. A Bangladesh Bank official told the FE that the BB had not issued any instruction to the banks for seeking information on source of money from importers. Under the circumstances, one might feel tempted to ask a relevant question: Why should commercial banks that are in a fierce competition to secure business scare away its clients asking too many questions about sources of their money that too in the absence of any order from their regulator to this effect? Does not such behaviour on the part of banks appear rather strange when the banking sector have a huge amount of excess liquidity?
Actually, it would have been fair on the part of the administration to give the bankers or the Association of the Bankers, Bangladesh (ABB), a chance to explain their position on the alleged 'harassment' of their clients. During the initial stage of the anti-corruption drive, a number of government agencies approached the banks seeking information about the accounts of a large number of 'corruption suspects' and tax evaders. On the top of such agencies was the National Board of Revenue (NBR) which asked a number of banks to freeze accounts of corruption suspects and gather information about transactions through their bank accounts. The activities of official agencies probing into alleged corruption and tax-evasion scared both banks and their clients. So, to avoid risks, banks decided to be extra-cautious which might have hurt the interests of some businesses and investors.
As a matter of fact it is very difficult to blame one particular group, be it individuals or institutions, for the irregularities that had taken place for the last thirty-six years. Every group-politicians, businessmen, professionals and bureaucrats-had worked hand in glove to plunder resources. Of course, there were a few exceptions. But they being the minority either failed to get their messages heard by the majority, who became increasingly busy in minting money through all possible unscrupulous means, or did not dare earn the wrath of all powerful nexus of evils. That minority saw a ray of hope in the present caretaker administration that soon after its assumption of power had made it no secret that its primary goal was something more than holding a free and fair national election. It wanted to cleanse politics, businesses and administration of corrupt elements. The government that has accomplished its job partially since its coming to power in January last is unlikely to achieve all its goals by the time it relinquishes power to an elected government. Time and the very complex nature of problems-social, political and economic-seem to have emerged as major hurdles.
This particular issue came up for discussion at the government-business dialogue and the banks were criticised for enforcing certain rules and regulations that they had ignored in the past, thus creating a sense of panic among the businesses. A Bangladesh Bank official told the FE that the BB had not issued any instruction to the banks for seeking information on source of money from importers. Under the circumstances, one might feel tempted to ask a relevant question: Why should commercial banks that are in a fierce competition to secure business scare away its clients asking too many questions about sources of their money that too in the absence of any order from their regulator to this effect? Does not such behaviour on the part of banks appear rather strange when the banking sector have a huge amount of excess liquidity?
Actually, it would have been fair on the part of the administration to give the bankers or the Association of the Bankers, Bangladesh (ABB), a chance to explain their position on the alleged 'harassment' of their clients. During the initial stage of the anti-corruption drive, a number of government agencies approached the banks seeking information about the accounts of a large number of 'corruption suspects' and tax evaders. On the top of such agencies was the National Board of Revenue (NBR) which asked a number of banks to freeze accounts of corruption suspects and gather information about transactions through their bank accounts. The activities of official agencies probing into alleged corruption and tax-evasion scared both banks and their clients. So, to avoid risks, banks decided to be extra-cautious which might have hurt the interests of some businesses and investors.
As a matter of fact it is very difficult to blame one particular group, be it individuals or institutions, for the irregularities that had taken place for the last thirty-six years. Every group-politicians, businessmen, professionals and bureaucrats-had worked hand in glove to plunder resources. Of course, there were a few exceptions. But they being the minority either failed to get their messages heard by the majority, who became increasingly busy in minting money through all possible unscrupulous means, or did not dare earn the wrath of all powerful nexus of evils. That minority saw a ray of hope in the present caretaker administration that soon after its assumption of power had made it no secret that its primary goal was something more than holding a free and fair national election. It wanted to cleanse politics, businesses and administration of corrupt elements. The government that has accomplished its job partially since its coming to power in January last is unlikely to achieve all its goals by the time it relinquishes power to an elected government. Time and the very complex nature of problems-social, political and economic-seem to have emerged as major hurdles.