Tk 92,261cr embezzled in 24 banking scams in 15 years: CPD

The Centre for Policy Dialogue (CPD) has informed that about Tk 92,261 crore were embezzled in 24 major banking scams over a period from 2008 to 2023.

The embezzled amount was also equivalent to 12 percent of the national budget for FY24 or two percent of the GDP of FY23.

The civil society think-tank observed that all individuals involved with fraudulent activities should be investigated and brought to justice.

The CPD today shared the data at a press conference on the banking sector as an interim government, led by Nobel laureate Professor Dr Muhammad Yunus, was sworn in as the Chief Adviser on August 8, following the fall and exit of Sheikh Hasina from Bangladesh on August 5 in the face of a student-led mass uprising centering the quota reform movement.

"Previously good banks have experienced a misfortune decline in their performances after hostile takeovers by crony capitalists," said Fahmida Khatun, executive director of the CPD, while presenting a paper co-authored by CPD Research Fellow Syed Yusuf Sadat.

She said several banks are clinically dead, but have been kept alive through bailout and thus recommended giving go-ahead to closing down banks that are on the verge of collapse. She said the banking sector, a vital pillar of the economy, has been suffering from vulnerability over time manifested through high loan defaults.

Regrettably, the previous government did not keep its commitments to safeguard the banking sector being expressed in various policy documents and election manifesto, she added.

Fahmida Khatun, however, said there has been an erosion of public trust in the banking sector due to the continuous deterioration of the health of the sector and inadequate measures taken by the policymakers of the former government.

Sporadic measures were not successful since the nature and depth of the problem require comprehensive due diligence and structural reforms, she added. She said that reforms must be backed by political will as there will be resistance from the vested interest groups.

She mentioned that a goal-specific, time-bound, transparent, unbiased, inclusive and independent Banking Commission should be formed to bring transparency into the prevailing situation, identifying the root causes of the manifest problems, and suggest credible measures for improving the situation in a sustainable manner.

At the briefing, CPD Distinguished Fellow Prof Mustafizur Rahman, Research Director Khondaker Golam Moazzem and Senior Research Fellow Towfiqul Islam Khan were present, among others.