ICC chief slams 'spoon-feeding' of weak banks, demands end to bailout culture

Mahbubur Rahman, President of the International Chamber of Commerce (ICC) Bangladesh, has strongly criticised the practice of providing artificial life support to failing banks, warning that such measures will not resolve the banking sector crisis.

Speaking at a discussion on 'Banking Sector Reforms' organised by The Financial Express on Thursday, Rahman said bankruptcy laws should be allowed to run their natural course instead of using taxpayer money to prop up insolvent institutions.

He questioned the effectiveness of the independent director system, calling it "dependent rather than independent." Rahman cited cases where independent directors remained silent despite witnessing corporate wrongdoing.

The business leader criticised the central bank's Tk 225 billion liquidity support to six troubled banks in November 2024, calling it unsustainable. He also raised concerns about the proposed merger of five Shariah-based banks, questioning whether retired bureaucrats have the expertise to run the Tk 200 billion entity.

Rahman proposed consolidating state-owned banks into just two institutions and urged the finance adviser to legally enshrine central bank autonomy before leaving office. He called for strict action against willful defaulters while supporting genuine businesses in temporary distress.