Iftekharuzzaman also said, ‘Apparently, what is happening is the use of paracetamol in cancer treatment. On the one hand, in the name of consolidation, the culture of bad loans is being deepened by protecting those responsible for bad loans and fraud in the banking sector, while on the other hand, the success of strong banks is followed by a strong effort to digest bad banks, which has spread a new atmosphere of uneasiness and apprehension throughout the sector.’
The executive director of TIB said that there are three types of banks in the discussion of merger: public-public, private-public and private-private. In this case, it is not clear whether these banks have been selected for merger on priority basis or how it has been decided that a weak bank will be merged with a strong bank. A number of banks that were out of merger talks have been kept afloat with liquidity support.
Iftekharuzzaman said, on the other hand, the amount of defaulted loans of the two government banks, which are known to be strong, are also quite large. In such a reality, without ensuring effective accountability-based good governance to deal with the core problems of the banking sector, the idea that the crisis can be tackled only by consolidation is really illusory.
