Banking sector recovery may cost Tk 60,000cr per year: Governor

Bangladesh will need to allocate Tk 60,000 crore annually from the national budget over the next five to eight years to rebuild its banking sector following extensive financial irregularities and structural damage, Bangladesh Bank Governor Mostakur Rahman has said.

He made the disclosure at a promotional event for Bangla QR transactions organised by ONE Bank PLC at United International University (UIU) in the capital on Saturday (October 10).

Describing the scale of financial misconduct in the banking sector, the governor said nearly one-third of the banking system’s total funds had been looted by the time he assumed office.

He said the money siphoned off from the financial sector represented a huge opportunity cost for the country.

The amount could have been used to provide direct assistance to two crore families or finance two major infrastructure projects comparable to the Padma Bridge, he added.

Expressing strong indignation over the alleged plundering of public funds, Rahman said conventional terms were inadequate to describe the scale of the wrongdoing. He characterised the acts as large-scale looting rather than ordinary theft and blamed those responsible for contributing to the liquidity crisis facing the banking system.

The governor, however, pledged firm action to address the crisis and restore confidence in the sector. He said legal measures were already under way to hold those involved in financial irregularities and money laundering accountable and recover assets taken from the banking system.

Rahman also sought to reassure ordinary depositors, saying efforts were being made to recover misappropriated funds and bring those responsible to justice.

The proposed annual budget allocation would be required for five to eight years, according to the governor, although he did not provide a detailed breakdown of the estimated recovery costs or explain how the funds would be allocated.