Merger of banks not actual solution, says Dr Saleh Uddin

Liquidation of banks is more important than reorganising such as merger to salvage the problem-ridden banking sector, said Dr Saleh Uddin Ahmed, former governor of the Bangladesh Bank (BB).

He said the government should address the moral hazards and flaws in existing policy in the banking sector including allowing family members on board. 

“It’s a welcome move to merge banks but getting its outcome is complex,“ Mr Ahmed said.

"The banking sector needs to be controlled with iron fists," he added.

Strict penalties for loan defaulters along with identifying responsible persons for weakening the banks and bringing them under punishment, cautious moves for not to make strong banks weaker after the merger, and empowering Bangladesh Bank to take decisions are the major factors that should be addressed.

Debate for Democracy (DfD) organised the debate competition on ‘Merger of banks would strengthen good governance in banking system’.

Hassan Ahmed Chowdhury Kiron, chairman of the DfD, chaired the programme. He placed ten-point recommendations including upholding depositors’ confidence in the recently merged two banks, Exim and Padma.

Mr Kiron also recommended the formation of a special tribunal to realise embezzled funds by unnamed persons, forming an independent banking commission, exposing the loan defaulters' names in the National Parliament, banning overseas tours, intensifying monitoring, etc.

BGMEA University of Fashion and Technology won the debate competition defeating Prime University.

[email protected]