Dr Muhammad Abdul Mazid, Former Chairman, National Board of Revenue (NBR) :
Banking business in the country will be difficult if discipline cannot be brought back. The banking sector face a hard time unless some reforms are made to it.
Many people are taking away money from the banks in different ways and the existing regulating system can hardly check it. A person tasked with monitoring or regulating the banking system is seen to swing into action following media reports. This makes it clear that the system is not functioning properly. Retaining the dysfunctional system will not bring any good.

Government money is one of the sources of capital for the private banks in the country. The government money is, in other words, people’s money. There is no problem if the banks do business with the depositors’ money and then refund it.

We can take here the case of Farmers’ Bank, for instance. As per the Basel III framework, banks have to keep at least 10 percent of their capital against their risk-weighted assets.

Now if government money is spent to meet the capital shortfall of private banks then it will put the country’s economy at high risk. Everything will be alright if the banks conform to the rules. Fundamental systems should be maintained properly for the sake of capital safety. Therefore, the existing banking system has to be reformed and discipline must be brought back. Otherwise, it will be quite difficult to do business in the current situation.

Translated by Hossen Sohel