Banking On Uincertainty

I do not believe in taking the right decision, I take a decision and make it right.

- Wafiur Rahman​​​​​​​

The growth of the banking sector in the past decade and the increasingly smarter services provided by quite a number of banks to their clients have overshadowed the reports of lacklustre banking and default loans of the 1980s and the 1990s. In fact, the new generation banks have attracted the country’s one of the biggest pools of educated workforce. Many of them have shown magical uptrends of earning profit at a time when banks in developed countries struggled as reflected in the events of global economic meltdown.

Encouraged by the magic boom in banks and banking services in Bangladesh, new banks joined the market. The ‘generous’ policy of successive governments raised the number of banks above 50. Such banks, the private commercial banks (PCBs) in particular, saw growth in operating profit in a range between 30 and 95% in the first half of 2012. As many as 27 PCBs recorded more than Tk 6,500 crore operating profit, which though did not indicate the actual financial position of each bank.

Then came to the limelight, perhaps suddenly and surprisingly, the Hall-Mark scandal with an involvement of Tk 4,000 crore that jolted the entire banking sector. It reminded all that the dream of saying goodbye to the era of bad loans through proper analysis of risks and of practicing ethical banking remains elusive to a large extent. The scam also raised questions about the health of the overall banking sector and effectiveness of the regulatory system now in place.