'Would-be' banking commission needs to work independently

The local think-tank Centre for Policy Dialogue (CPD) welcomed on Saturday the move to form a banking commission to address the existing problems of the key financial sector.
It believes that the financial domain is now "confined to some people and some institutions and weakening fast".
The country's oldest private think-tank said the commission should be empowered to release interim reports on the banking sector before June next as there are some worst areas in the system that need to be addressed immediately.

"The top political leadership has given the blessing and consent on formation of the commission, we welcome it," said Dr Debapriya Bhattacharya, a distinguished fellow at the CPD, while talking to reporters at a press conference in the city on the occasion.
"The would-be commission should be empowered to work independently and need conducive environment…."
"There is now need for enlightened support to the Commission from the political leadership, otherwise it will remain merely a commission like other commissions."
CPD executive director Dr Fahmida Khatoon moderated the conference. CPD's another distinguished fellow Dr Mustafazur Rahmnan and head of research Dr Khondker Golam Moazzem were present among others. The CPD, however, did not make any presentation on the issue.
Dr Bhattacharya said the people are now helpless and panicky over the poor state of the banking sector.
It is evident that there is a lack of confidence and transparency in the system, he commented.
"The money market is now facing capital shortages, the non-performing loan is on the rise and many people are not depositing their hard-earned money with the banking system [being fretful]," he said.
Dr Bhattacharya, who was earlier a member of another such reform committee, has clarified that the CPD is favouring an ad-hoc commission to address the growing problems of the banking sector.
"Will the Commission work with the banking sector only? Or only state-owned banks? Will they consider private or foreign banks as well?" Dr Bhattacharya questioned in view of the required terms of reference of the would-be commission.
He said the others in the financial sector have been facing problems because of the poor state of the overall banking sector.
He said the other non-bank financial sectors like the capital market are also passing through a very tough time as the people have lost confidence on the market. "Will it bring the (capital) market under its jurisdiction?"
He said there are some cases now pending with the Anti Corruption Commission (ACC). "Will they take up such issues under their terms of references? Will they consider the cases which are yet to be placed before the ACC?" he questioned.
He further said, "Will those who are involved with capital flight be brought under the commission's jurisdiction?"
The CPD distinguished fellow said the central bank is empowered to identify such problems in the banking sector and take actions. "Will the commission work out why the central bank failed to carry out its due responsibilities?"
He said identifying the real data of the system should also be part of the functions of the commission as there are some internal data that show the NPL (non-performing loan) volume is much higher.
He said the CPD expects that the would-be commission should asses the implications of the poor situation of the banking sector for the national economy.
"We expect that the commission will give a rescue plan for the banking sector that will be fruitful, realistic and sustainable."
"Will the commission recommend a scientific formula on the much-talked-about 6.0 per cent and 9.0 per cent rates of interest on deposits and lending respectively?," Dr Bhattacharya said.
Speaking on the occasion, another CPD distinguished fellow Dr Mustafizur Rahman said the commission should delve deep into the crisis.
"We will monitor who will be members of the commission and how they will be empowered," he added.
Speaking at the programme, CPD executive director Dr Fahmida Khatoon said it had been demanding formation of such a commission after the Hall Mark scandal involving the state-owned Sonali Bank since 2012.
She said the CPD welcomes it as the banking sector is weakening fast.
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