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Economists, former bankers and depositors on Saturday said prolonged instability in the country's financial system could seriously undermine the broader economy.
Taking part in a seminar in Dhaka they stressed that restoring confidence in banks has become critical to preventing deeper economic distress.
They also questioned recent changes to the Bank Resolution Act, arguing that provisions allowing controversial former bank owners to return could further weaken public trust and complicate efforts to stabilise the sector.
The collapse of the economy would become imminent if the crisis in the banking sector is not resolved, former caretaker government adviser Hossain Zillur Rahman said on Saturday.
"There is no debate that the banking sector is in disaster mode. The whole economy is stagnant. Economic indicators are still not functioning well. Economic collapse cannot be prevented if the crisis in the banking sector remains unresolved," he said.
He made the remarks as chief guest at the seminar titled "Disaster in the Country's Banking Sector in the Perspective of the Islamic Banking Sector: Its Impact on the National Economy and the Way Out".
The seminar was organised by the Bank Customer Forum at the CIRDAP auditorium in the capital. Economists, former bank officials and depositors and customers of Islamic banks attended the event.
Mr Rahman said objections raised against several sections of the new Bank Resolution Act were reasonable and that there was "no economic explanation" for certain provisions.
"Why has a new section been inserted in the law to bring back those who created the problem?" he asked.
"Those who played a key role in the disaster in the banking sector have allegedly been given space to return. This has raised serious questions," he added.
However, he stressed the need for a realistic solution to the crisis.
"From the perspective of political economy, this is not merely a matter for the Ministry of Finance; it concerns the entire government. There can be no solution without collective goodwill, starting from the head of government," he said.
He also echoed concerns raised by other speakers regarding depositors who are struggling to withdraw their savings.
"The suffering of depositors is that they are unable to access their deposits," he said.
"We must seize the opportunity to accelerate the special fund for the relief of depositors," he suggested.
BadiulAlamMajumder, editor of Citizens for Good Governance (Sujon), said that looting and irregularities in the banking sector inevitably damage the wider economy.
"The most important thing in the banking sector is trust," he said, calling for the independence of Bangladesh Bank to be ensured.
"I hope this government will ensure that," he added.
He also urged the government to revise the controversial section of the Bank Resolution Act.
Former FBCCI Vice-President AbulKashemHaider also spoke at the seminar.
Mizanur Rahman presented the keynote paper, discussing how Islami Bank Bangladesh PLC was allegedly taken over and looted under state control.
Former Trust Bank Managing Director FarukMoinuddin said the banking sector could not be reformed without strong political will.
Speakers at the seminar also proposed displaying photographs of alleged bank looters at the July Museum. They further demanded statements from intelligence agencies and government bodies involved in the takeover of Islami Bank.
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