Abdul Hai Sarker Lawlessness in industrial hubs has emerged as a major challenge for the economy, badly impacting cash flow to the banking sector, says Abdul Hai Sarker, newly appointed chairman of the Bangladesh Association of Banks (BAB).
In an exclusive interview with The Financial Express recently, the chairman of the country's apex body of bank shareholders said industrial production had been severely impacted because of the emergence of a new set of people after last year's mass uprising.
He said one political party had destroyed the country over the last 15 years.
"In the face of the student-citizen uprising, that party chief left the country. Now, different sets of people under various banners want to control industrial belts by hampering production," said Sarker.
"It is creating negative impacts not only on the economy but also the banking sector. The problem [lawlessness] keeps spreading from one place to another. It needs to be addressed immediately for smooth functioning of production units," he said.
Sarker, also the Dhaka Bank chairman, said good cash flow to manufacturing units helps bolster banks' liquidity and also foreign exchange reserves.
"If factories run smoothly, there is a vibrant forex market and the money supply will rise. Besides, industrial loans will not turn bad, while employment will be generated," the senior banker noted.
Regarding the central bank's cash-feeding programme for the crisis-ridden commercial banks, he said a bank's existence completely depends on the trust of depositors.
The struggling banks are now facing a trust deficit due to a lack of corporate governance, he further said.
"They need to take on a bunch of programmes, including establishing good governance, to bring back depositors' confidence. Otherwise, only liquidity support is not enough for their existence to continue," Sarker stressed.
When his attention was drawn to BAB's activities before the uprising, he said the past regime had used the platform only to collect funds from banks.
"The association's members were not allowed to give suggestions. In fact, we [members] would enter the meeting room with our hearts beating too fast because of fear driven by the possible donation amount," said Sarker.
He continued, "Some members would sometimes want to argue over a certain decision, but the then BAB boss would not allow that, saying everything had been decided earlier. After the meeting, the participants used to get Tk 5,000 in attendance fees from the association.
"They then had to pay millions in the form of contributing to the Prime Minister's Office fund. No documents were maintained."
Speaking about his plan to restructure BAB, he said it would be converted into a full-fledged secretariat and a secretary would be appointed to make it an effective platform, which would contribute to the banking industry's wellbeing.
Sarker said BAB had remained ineffective for the last 17 years, which was one of the reasons behind the banking industry's poor state.
"My responsibility is to make the platform effectively active. It will not be used as only a body to collect funds from banks in the coming days. I must uphold the association for which it was formed," he added.
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