President Mirza Fakhrul Islam Alamgir has called on bank owners and senior bankers to take responsible steps to restore public confidence in Bangladesh’s banking sector and rebuild its reputation.
He made the call on Thursday when a delegation of the Bangladesh Association of Banks (BAB), led by its Chairman Abdul Hai Sarker, met him at Bangabhaban in the afternoon. The President’s Press Secretary, Md Sarwar Alam, briefed journalists after the meeting.
Chairmen, managing directors and chief executive officers of 26 state-owned and private banks were part of the delegation, bringing together senior representatives from a significant section of the country’s banking industry.
During the meeting, the President said people had spent years struggling to establish democracy and good governance, while, according to him, vast sums of money had been siphoned out of the country through the banking system with the backing of powerful quarters.
He said the developments had left the banking sector extremely fragile. All stakeholders, he stressed, must now work responsibly to address weaknesses in the economy and financial system while rebuilding the confidence of customers and the wider public.
Public trust is central to the functioning of banks because depositors rely on financial institutions to safeguard their savings, while businesses and entrepreneurs depend on banks for access to credit and payment services. A loss of confidence can therefore affect not only individual institutions but also wider economic activity.
The President also said that no political figures were being appointed as bank directors under the current government. He expressed the hope that the approach would contribute positively to preventing irregularities in the sector.
Focus on CSR and entrepreneurial finance
Mirza Fakhrul urged bank owners to use corporate social responsibility (CSR) funds for projects with wider social benefits. He specifically mentioned technology and engineering education institutions, hospitals and colleges, along with initiatives aimed at social development and human welfare.
He also called on banking leaders to ensure access to credit for new and young entrepreneurs. Investment in innovative sectors, including agro-processing industries, should receive greater encouragement, he said.
For emerging businesses, access to finance can be a key factor in turning new ideas into viable enterprises. The President’s call therefore placed particular emphasis on ensuring that the banking sector supports productive investment rather than focusing solely on traditional lending activities.
Bankers highlight default loans
At the meeting, BAB leaders described banking as a major driving force of the country’s economy. They also outlined several longstanding problems affecting the sector.
The delegation said thousands of crores of taka had become default loans after powerful groups allegedly siphoned funds from banks in the past. They described the failure to adequately protect depositors’ interests as “humiliating” for the banking industry.
Default loans can place pressure on banks by reducing the funds available for fresh lending and weakening their financial position. Recovering such loans and ensuring responsible lending practices are therefore closely connected with the broader stability of the banking system.
The BAB leaders also told the President that only around 30 per cent of the country’s total financial transactions were conducted through banking channels. They stressed the need to expand the digital economy and introduce QR code-based transactions more widely.
Digital payment systems can make everyday transactions faster and more accessible while reducing reliance on cash. The bankers’ comments reflected their call for broader use of formal financial channels across the economy.
Expansion of banking services
The delegation also raised the need to increase employment in the banking sector and expand branch networks to village-level areas. Greater geographical access to banking services could help bring more people into the formal financial system, particularly in areas where access remains limited.
The bankers also called for maintaining the existing rules concerning paid-up capital and dividend payments. They stressed the importance of law and order for the smooth operation of banks and businesses.
The BAB delegation briefed the President on the banking sector’s current problems, challenges and prospects during the meeting.
The discussions ultimately centred on several interconnected issues: restoring public confidence, protecting depositors, addressing default loans, expanding digital transactions, supporting young entrepreneurs and extending banking services beyond major urban centres. The President urged those responsible for running banks to play an active role in addressing these challenges and strengthening the sector’s standing among customers and the wider public.
