Budget is the annual work plan of a state. For more than two centuries, governments in different countries of the world have been preparing budgets based on their income and expenditure, development plans and economic priorities. In Bangladesh, too, a regular budget is presented every year, which is a positive aspect. Whatever the political or economic situation, Bangladesh has never been run without a budget since independence.
As a businessman, I consider this year's budget to be an optimistic budget. After a long period of economic pressure and crisis, the government has taken various plans to restructure and revive the economy. This is reflected in the size of this year's budget. Where once a budget of 20 to 30 thousand crore taka was considered huge, now the budget amount has reached about 9 lakh 38 thousand crore taka. This indicates the expansion of the country's economy and the comprehensiveness of the government's expenditure plan.
However, this budget is a deficit budget. The government has announced a budget with a deficit of about 2 lakh crore taka. The question may arise whether the government will be able to collect so much money or not. But the budget is basically a plan. This budget has been prepared by calculating the amount required to carry out the government's priority expenditure and development activities.
Currently, one of the most discussed sectors in Bangladesh is the banking sector. It seems that almost every person in the country is concerned about this sector in some way or the other. Since the start of private banking activities in 1983, the banking sector has progressed through various discussions, criticisms and reforms. From the beginning, there was a lack of necessary compliance and good governance in many areas, the impact of which has become more evident with time.
Especially in the last one and a half years, the weaknesses of the banking sector have become more public. Many say that the problems that were buried under the carpet until now have now become visible. Currently, there are about 18 lakh crore taka deposits in the banking system, of which approximately 6 lakh crore taka are identified as non-performing loans. That is, about 30 percent of the total deposits are at risk. As a result, concerns and discussions about the banking sector are gradually increasing.
In this context, the government has allocated about 40 thousand crore taka for restructuring the banking sector in this year's budget. This is an important step. But the question is, how will this money be used? Will it be spent on reviving weak banks, or will it be used to protect depositors of potential mergers or closed banks?
Let's say, the total deposits of the banks that are being identified as risky are about 2 lakh crore taka. The government will not be able to return this huge amount on its own. Therefore, the problem needs to be solved through a clear policy. Most of the depositors in Bangladesh are ordinary people or retail customers. Behind their savings are personal plans and concerns about future security. Therefore, it is difficult to take a decision to reduce the depositors' money if the bank fails.
That is why the government's allocation for restructuring the banking sector is seen as positive. It is not just financial assistance, but also an attempt to restore people's confidence in the banking system. However, good governance, accountability, effective control and initiatives to reduce non-performing loans need to be further strengthened to achieve long-term success.
In our current bank management Directors can take part in the loan approval process. It should be banned. To get out of the current crisis in the banking sector and ensure good governance, Directors should not participate in the day-to-day operations of the bank and lending is an integral part of the daily work of any bank. The Board of Directors will ensure that the management authority is following the guidelines of the regulatory body correctly and the Board of Directors will formulate necessary policies for good governance, serving the interests of depositors and increasing the profits of shareholders.
Overall, there is a positive expectation in this year's budget. Only time will say how successful the government's plan will be in addressing the current challenges of the economy and the banking sector. However, the message of restructuring and reform given in the proposed budget is undoubtedly promising.
The writer is an industrialist and a former Director , FBCCI
