Thursday 1 June 2023 ,
Thursday 1 June 2023 ,
Latest News
18 April, 2018 12:06:56 AM / LAST MODIFIED: 18 April, 2018 12:07:16 AM

Banking sector plagued by indiscipline: CPD

Banking sector plagued by indiscipline: CPD
Dr Debapriya Bhattacharya, distinguished fellow of Centre Policy Dialogue (CPD), an independent think tank of the country, speaks at a press briefing in the capital yesterday. Executive Director of CPD Dr Fahmida Khatun, Research Director Dr Khondaker Golam Moazzem, and Research Fellow Towfiqul Islam Khan are also seen. Focus bangle photo

The country's banking sector is plagued by serious indiscipline, which has become a major handicap, according to the Centre for Policy Dialogue (CPD). Economists, too, have described this phenomenon as an ominous sign for the economy.

The CPD estimates that USD 1.1 billion would be required to cover the expenditure for Rohingyas on account of food security, sanitation, shelter, site management and health. It has proposed proper allocation of funds for this purpose in the upcoming budget.

CPD fellows came up with these observations at a press briefing in the capital to present its recommendations for the 2018-19 budget.

“To tell the truth, 2017 was the year of banking scams. Now, the banking sector has become an orphan abused by its guardians,” said Dr Debapriya Bhattacharya, a distinguished CPD fellow.

The protectors of the banking sector have acted as its destroyers, he said, adding, “Now the country’s economy is in a gloomy condition. If this trend continues, the shortage of revenue will stand at Tk 50,000 crore at the end of the current fiscal year.”

He also said Bangladesh is descending into a state of ‘incomeless employment’ with a decline in the real income of working people.

Analysing the state of the Bangladesh economy in FY2017–18, the CPD fellow said: “The banking sector has been plagued by financial scams, non-performing loans, inefficiency, and slack monitoring and supervision.”

In its analytical presentation, the CPD urged the government to design the budget for a stable macro-economy.

Though employment generation registered some increase in 2017, the real income had declined, pointed out Bhattacharya.

According to the CPD report, the real monthly income of women suffered 3.8 per cent erosion, while that of men went down by 1.9 per cent. In urban areas, male workers’ monthly income increased by 0.9 per cent, while they faced 4.1 per cent income erosion in rural areas. More than one-third of the total youth labour force with higher education remained unemployed.

Fearing the possibility of money laundering before the upcoming election, Bhattacharya said: “The remittance increases before each election, but more money gets laundered.”

According to him, money laundering happens through the banking sector, unstable capital market and high import payments.

“Female workers and rural workers are facing a greater decline in their real monthly income, while the unemployment rate among the youth with higher education is increasing,” he noted.

There was also regional discrimination, he said, pointing out that the decline was higher among the people of North Bengal and Southeast Bengal.

The CPD also recommended an increase in the allocation for social security and keeping the Rohingya crisis in mind while preparing the next budget. Besdies, transparency in the allocation of budget at the ministerial level in view of the Rohingya crisis should be ensured, urged CDP in its recommendations.

Information on the flow of international funds and the use of the funds for Ronghyas should be made readily available, it said.

CPD research director Dr Khondaker Golam Moazzem said that institutional investors such as banks could actually play a significant role in controlling the capital market by maintaining a proper monitoring system.

The CPD suggested that the government should consider reducing the personal income tax rate for the first slab to 7.5 per cent from the prevailing rate of 10 per cent. Adjust-ments in corporate tax rates should be done in a staggered way over the medium term in order to absorb any revenue shock.

The speakers stressed the importance of looking at the qualitative results of GDP growth and how the increasing GDP has been impacting people’s lives.

According to the CPD, Bangladesh Bank must pursue a cautious monetary policy in the coming months, consider discouraging imports of consumer and luxury goods by raising L/C margins for imports, and the budget for FY2019 should consider raising the tax-free income ceiling to Tk 3 lakh in order to provide respite to lower middle-income households.

According to the research body, independent and rigorous economy-wide analyses should be conducted for all types of reforms, while emphasis should be placed on timely implementation of the VAT and SD Act 2012, establishment of a Public Expenditure Review Commission to ensure accuracy of the cost of estimating public investment projects, consideration of the establishment of a permanent Local Government (Finance) Commission towards effective devolution of power, and introduction of appropriate financing modalities for local governments.

CPD research fellow Towfiqul Islam Khan gave a presentation on ‘State of the Bangladesh Economy in the fiscal year of 2017-18’.

Among others, CPD distinguished fellow Prof. Mustafizur Rahman, executive director Dr Fahmida Khatun and CPD research director Dr Khondaker Golam Moazzem also spoke on the occasion.





Most popular  
On Business
  • Most Viewed

Copyright © All right reserved.

Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Disclaimer & Privacy Policy
About Us
Contact Us

Powered by : Frog Hosting