Mindless consolidation won\'t do

Essentially, most of the private sector banks are in decent health when it comes to profits. The caveat remains that of bad debt and we know that public sector banks are in an absolute mess. According to recent reports, Tk 700 billion (70,000 crore) has been rescheduled under terms and conditions not fully revealed. Five of the top defaulters have defaulted again in their rescheduled loans, are asking for fresh rescheduling and a waiver of interest. None of these are in the list of top tax payers and aren't reporting losses. Those listed aren't in negative territory either. While it remains to be seen how long this game is played, the Finance Minister had hinted that consolidation might take place. In other words, there could be optional or forced mergers with debt being bought off and hopefully, paid.
With remittances going south and export earnings slowing to snail's pace it isn't surprising that the spread between official and unofficial rates of the dollar going up. After years of being artificially propped up through intervention, rates have slipped the noose. That, too, after significant greenback injection by the central bank. The upshot is imports becoming expensive though it may partially help in export competitiveness. 
The Minister didn't elaborate. Just as the report on the foreign reserve theft has never been published, neither have the facts and figures of terrorist financing by Islami Bank that led to a sordid midnight coup of sorts whereby legitimate shareholders were forced to give up their shares to entities, some of which haven't been heard of. The facts that are emerging is that Islami Bank funds 55 per cent of all financing to small and medium enterprises (SMEs) and the newest revelation that 25 per cent of remittances are channelled through them. In plain terms they singly  hold the bulk of greenbacks sent back by the workforce. It speaks of consumer confidence that very few banks enjoy for all their flaunted multinational bank background top executives, 
There has been criticism about the Sharia banking system followed by Islami Bank. Their consumer credit basket is leaner and differs from others and they still enjoy custom. Not for them is any slick advertising campaign, though as in the past there's a lot of arm-twisting in having them finance events and such they normally would not touch. 
But if by 'consolidation' Mr Muhit is thinking of this bank being merged with another, it could well spell the end of the one bank that has repeatedly been voted one of the best in Asia, even though they choose not to trumpet this. Islami Bank's approach to profit sharing has been accepted by its clientele for better or worse. Consolidation is good provided it is voluntary and based on sound economic considerations. Let's also not forget the list of banks that have applied to go into operation and the non-banking financial institutions that want to turn into banks. 
For intervention to force it to do otherwise hits at the base of free-market economy. SME funding is still well below the levels required and that's an outcome of stiff-necked attitudes and cumbersome processes. There are multinational banks that are so hyped up about the Know Your Customer (KYC) updates demanded by the central bank that they send duplicates of both the reminder and acknowledgement letters in what must go down both as useless waste of time, not to mention paper. 
Senior bankers are putting down the phenomenon of the rising dollar as being natural. If it continues, the answer won't be as glib. Traditionally, import taxes produce more than the recently introduced export tax. Imports are weak as it is and a stronger dollar won't help. Capital imports going down is obviously the last straw.
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