On April 5, The Daily Star published a report titled "Banks face bigger crisis" on its front page. The report, citing a think-tank, said that the decision to slash the cash reserve ratio (CRR) and allow state-owned banks to keep half of their funds with private banks, will lead to the crisis ballooning further, instead of solving it.
A number of banks have suffered tremendously over the past few years due to increasing amounts of non-performing loans. Their management and board members have often been found involved in gross irregularities. Yet, instead of punishing those who were guilty and taking serious measures that would force banks to recover the loans, the government has continually rewarded the banks and bailed them at the expense of the taxpayers.
Such bailouts will not save banks or the sector as a whole. Rather, the fact that the government has succumbed to the demands of influential bankers may have encouraged them to further carry on with their corrupt practices.
I urge the government to side with depositors rather than bankers. It needs to bring those who had allowed these loan scams to take place, to justice. Only then will we see the sector regain some form of stability.
Shakhawat Hossen, By e-mail