Democracy’s renewal is a gift, but it has arrived at a fragile moment. Many banks’ balance sheets are wounded, their public credibility shaken, and that fragility threatens the promise voters have just renewed.
Md. Shafiul Azam, Managing Director and CEO of Modhumoti Bank, opened the Daily Observer’s national dialogue with a stark, uncompromising warning: no nation can flout the laws of economic discipline without paying a devastating price.
“If you dam a river recklessly, the water doesn’t vanish �" it comes back to tear everything down,” he declared. “So too when rules and institutions are trampled by powerful interests: the return is not order but chaos.”
For Bangladesh, he said, that return is already visible in a banking sector teetering under the weight of mounting default loans, corrosive governance failures and systemic financial plunder. Over many years, he charged, influential groups have looted bank vaults in broad daylight, eroding public trust and pushing the economy to a perilous crossroads.
“When banking ethics collapse, trust in the state itself crumbles,” he warned. “A financial system cannot survive where accountability is selective and impunity becomes policy.”
Addressing the newly elected government led by Tarique Rahman, Mr Azam urged an immediate, uncompromising programme: restore discipline, rebuild credibility and re-establish moral authority across the financial sector. He said this demands not only tougher rules but decisive enforcement, sweeping institutional reforms and visible prosecutions of wilful defaulters.
“You cannot rebuild confidence with speeches alone; justice, transparency and courageous action are the only currency that will buy it.The era of shielding economic criminals with political cover must end.”
Mr Azam blasted a string of past regulatory missteps �" including the central bank’s ill-fated interest-rate fix, taken despite warnings from the IMF and independent experts �" as choices shaped by vested interests that left long-term damage.
“Our markets must steer themselves. Artificial rules and tailored regulations that favour a select few choke the natural momentum of growth. The new government must heed the market’s voice, not the pressure of influential individuals.”
Describing non-performing assets as the sector’s primary malady, he traced their rise to weak supervision, distorted regulation and governance captured to serve narrow interests.
“The NPL crisis is not an accounting problem; it is a moral and institutional failure,” he said. “When discipline collapses, inequality widens and opportunity contracts �" the whole nation pays.”
Mr Azam praised The Daily Observer for convening the dialogue From Ballot to Balance Sheet, calling it a timely forum to channel the new government’s mandate into ideas that repair Bangladesh’s economic foundations. “Nations prosper when dialogue replaces division,” he said. “Great civilisations are built not by silence but by the courage to listen, debate and unite.”
Reflecting on the keynote by Faruk Ahmed, he said the discussion had tackled the new administration’s toughest tasks: volatile markets, swelling inequality, runaway inflation and the urgent need for institutional stabilisation.
“Democracy’s renewal is a gift, but it has arrived at a fragile moment. Many banks’ balance sheets are wounded, their public credibility shaken, and that fragility threatens the promise voters have just renewed.”
He reiterated that rebuilding the banking sector is a national imperative �" essential to protect investment, restore confidence and secure long-term prosperity.
“No economy stands tall when its banking foundation is rotten with impunity and moral collapse. Rebuilding confidence requires discipline, accountability and action that everyone can see.”
Pointing to large-scale laundering and the unchecked rise of wilful defaulters, he said billions have been siphoned overseas over successive years, leaving deep institutional scars.
“These aren’t statistics �" they are thefts of the nation’s future,” he said. “Unless we forcefully confront the architects of that theft, inequality will widen and the poor will pay the heaviest price.”
On fiscal fairness, Mr Azam urged the new government to broaden the tax net and enforce compliance among the wealthy rather than shifting burdens onto ordinary citizens. He called for progressive reforms �" citing global debates in cities such as New York �" to ensure the rich contribute their fair share.
“Fixing fiscal imbalance is not about punishment; it is about restoring a social compact,” he said. “Fair taxation and inclusion are prerequisites for sustainable growth.”
Turning to Modhumoti Bank, he presented the institution as a counterexample: resilient, disciplined and customer-focused. “We have no capital shortfall, no provisioning gap, and more than half a million customers who trust us,” he said. “That resilience was built on a simple principle: governance before growth.”
He highlighted the bank’s asset quality: a classified loan ratio of just 2.30 percent versus an industry average exceeding 24 percent. “No depositor has ever left us unpaid. That’s not luck �" it is the result of relentless governance and strict credit discipline,” he said.
Explaining the bank’s approach, he underscored rigorous credit selection, continuous monitoring and timely intervention. “Disbursement is only the beginning,” he said. “Preserving portfolio health requires active supervision and courage to stop deals that look profitable today but toxic tomorrow.”
He argued that Modhumoti’s timely submission of audited financial statements for 2024 �" one of only 12 banks to do so on schedule �" reflects an institutional culture that values transparency and accountability over short-term gains.
After more than three decades in banking, Mr Azam closed with a firm appeal: restore integrity to finance, prosecute wilful defaulters, redesign fiscal policy for fairness, and make institutional reform the government’s first order of business.
“The salvation of our economy depends on restoring the rule of finance,” he said. “If we fail, the cost will be counted not just in numbers on balance sheets but in jobs lost, dreams crushed and a generation denied its future.”
