*Bold Reforms in the Banking Sector Essential to Restore Public Confidence*
*— Professor M. A. Barnik*

1. *Why This Crisis of Confidence?*

The banking system is one of the principal foundations of Bangladesh’s economy. The banking sector plays an indispensable role as a key driver of public savings, industrial and commercial financing, employment generation, and national development. However, due to years of irregularities, a culture of loan default, money laundering, weak governance, and a lack of accountability, the sector is now passing through a serious crisis of confidence.

The greatest asset of the banking sector is not money, but trust. Depositors place their hard-earned savings in banks because they have confidence in the system. Investors expand industries and businesses through bank loans because they trust the financial institutions. However, when influential individuals, large businesspersons, or even some people involved in state policymaking remain protected within circles of power and influence despite failing to repay bank loans, ordinary citizens naturally begin to ask: Is the law truly equal for everyone?

Until a convincing and visible answer to this question is established, it will be difficult to restore genuine confidence in the banking sector.

2. *Reasons for Depositors’ Concerns*:

At present, the country’s banks are carrying a massive burden of non-performing loans. A significant portion of these loans is concentrated among large borrowers. As a result, bank capital is weakening, access to credit for new entrepreneurs is becoming increasingly difficult, and concerns among depositors are growing.

Even more alarming is that allegations of loan default have, at different times, been raised against certain individuals serving as public representatives or against business entities under their control. Such realities raise serious questions about public ethics and state accountability.

In a democratic system, Members of Parliament and ministers do not merely provide political leadership; they also symbolize public policy, the rule of law, and accountability. Therefore, their standards of financial responsibility should be even higher than those of ordinary citizens. Their responsibility toward a banking system built upon the public’s money is especially significant.

3. *The Government’s Challenge*:

In the current unstable banking environment, the government's greatest challenge is to establish financial discipline above political considerations. If different standards are applied in recovering bank dues based on an individual’s status, influence, or position, the crisis of confidence will only deepen.

4. *Measures That Should Be Considered Regarding Public Representatives Who Are Loan Defaulters*

*First*, an independent financial accountability framework may be established to monitor the loan status of Members of Parliament, ministers, and other constitutional office holders. Their loans, tax records, and financial obligations should be reviewed and verified periodically.

*Second*, swift loan recovery measures must be undertaken in cases of willful defaulters. Where necessary, legal actions such as asset seizure, share transfers, restructuring of business ownership, or other lawful measures should be pursued through the courts.

*Third*, the practice of granting special privileges or repeated loan rescheduling opportunities to influential individuals who fail to repay bank loans should be discontinued. The same law must apply equally to everyone for the same offense.

*Fourth*, mechanisms should be introduced to regularly verify whether the financial information declared in election affidavits is consistent with banking records.

*Fifth*, strict policies may be adopted regarding the appointment of loan defaulters to important state committees, financial policymaking bodies, or bank boards of directors.

*Sixth*, special financial courts or tribunals should be established to expedite the resolution of major loan default and money laundering cases.

*Seventh*, international cooperation should be strengthened to identify and recover funds that have been illegally transferred abroad, and a specialized state task force may be formed for this purpose.

5. *Broader Reforms Needed in the Banking Sector*

In addition to ensuring accountability among public representatives, comprehensive reforms in the banking sector are equally essential.

(1) Strengthening the independence and capacity of Bangladesh Bank;

(2) Ensuring professionalism in bank boards of directors;

(3) Establishing a loan approval system free from political influence;

(4) Introducing digital and real-time supervisory mechanisms;

(5) Disclosing the actual extent of non-performing loans;

(6) Strengthening depositor protection mechanisms;

(7) Taking swift and visible action against corruption and financial fraud.

6. *Bold Reforms Are the Only Way Forward*

To transform Bangladesh’s banking sector into a healthy, strong, and trusted institution, bold reform measures must be undertaken. In particular, ensuring the equal application of the law to public representatives is both a moral and constitutional obligation of the state.

The people want to see that no one is above the law and that no one can enjoy impunity after misusing public money held in banks.

Today, the banking sector’s greatest need is not new money, but renewed confidence. The first condition for restoring that confidence is accountability, good governance, and the impartial enforcement of the law.

For the protection of depositors’ savings, the stability of the economy, and the interests of future generations, the time has come to move forward with bold and meaningful reforms.