Banking Sector in Disarray Due to Government’s Whimsical Policies in Finalizing Financial Reports

Staff Correspondent

The interim government is indulging in whimsical behavior regarding the banking sector. Most private and state-owned banks in the country have yet to finalize their annual financial reports. This crisis has emerged due to complications in Bangladesh Bank’s strict inspection and No Objection Certificate (NOC) process.

As a result, 21 listed banks have been unable to approve their reports despite holding board meetings, while some banks have even canceled their meetings. This has also led to crises for renowned companies and industrial establishments facing scrutiny.

According to stock market regulations, banks must finalize their reports and declare dividends within four months of the fiscal year’s end. Although the banks’ fiscal year ended last December, the April deadline for submitting reports has already passed. So far, only 16 out of 36 listed banks have managed to declare dividends on time.

In March of this year, Bangladesh Bank issued new directives stating that banks that failed to maintain adequate provisioning or took special benefits from the central bank would not be allowed to declare dividends. This policy has prevented many banks from announcing dividends.

Several banks have finalized their financial reports but have not received NOC approval from the central bank. In some cases, NOCs have even been revoked. Due to delays in submitting reports, banks have written to the government requesting additional time.

Bangladesh Bank has stated that extra time will be granted only upon government approval. However, sources indicate that the government is unresponsive, as it appears more focused on suppressing the Awami League and pursuing personal gains rather than the country’s development.

This time, Bangladesh Bank has conducted inspections with greater professionalism, revealing the actual financial conditions, including defaulted loans.

Additionally, the boards of 14 private banks have been restructured. Several banks, including Islami Bank (controlled by S. Alam Group), First Security, and Global Islami, have incurred losses. Other banks, such as IFIC, UCB, Exim, and NRB Bank, are also facing loan irregularities and financial crises.

Listed banks that have yet to finalize their reports include Dhaka Bank, AB Bank, Mercantile Bank, One Bank, Premier Bank, South Bangla, Southeast Bank, Standard Bank, and state-owned banks like Sonali, Janata, Rupali, Agrani, BASIC, and BDBL.

On the other hand, banks that have finalized their reports on time include City Bank, BRAC Bank, Pubali Bank, Dutch-Bangla, Bank Asia, Eastern Bank, Jamuna Bank, Midland Bank, Mutual Trust Bank, NCC Bank, Prime Bank, Shahjalal Islami, Trust Bank, Uttara Bank, and ICB Islamic Bank. Among these, 10 banks have seen reduced profits, while 5 have seen an increase.

Officials at Bangladesh Bank say that, for the first time, the true financial condition of banks is being exposed. In the past, banks used various tactics to hide losses, but now they no longer have that opportunity.