The country's banking sector has breathed a sigh of relief as the government has backed away from its earlier decision to allow bank looters and willful loan defaulters to return to the already beleaguered financial sector by repaying only a lump-sum portion of their embezzled money.
This timely and pragmatic move will, beyond a shadow of a doubt, help restore the confidence of depositors, stakeholders and customers of the affected commercial banks, many of which once stood on the brink of collapse due to rampant corruption, cronyism and political patronage.
Surprisingly, the new government initially appeared to be following in the footsteps of its predecessor when it enacted the Bank Resolution Act on April 10, replacing an ordinance introduced by the interim administration. The Act included a controversial new Section 18(A), which allowed former directors or owners of banks to regain control by paying an upfront 7.5 percent of the amount injected by the government or the Bangladesh Bank.
However, the controversial Section 18(A) will now be removed, as Finance Minister Amir Khosru Mahmud Chowdhury announced in Parliament on Monday during his winding-up speech on the proposed 2026-27 national budget. He also warned that those who looted public assets would not be spared, while assuring the nation that depositors' interests would be fully protected.
On the same day in Parliament, Opposition Leader Shafiqur Rahman called on the government to take visible and effective measures to recover public assets laundered abroad. Notably, the lion's share of the looted bank funds, estimated at Tk 28 lakh crore, is believed to have been siphoned out of the country over the past 15 and a half years, mostly through under-invoicing and over-invoicing in trade transactions. This has significantly hampered the country's economic growth.
This is why the scourge of money laundering must be stopped. Dr Shafique warned that overlooking the issue would encourage new borrowers to become defaulters in the future under the belief that money launderers and willful loan defaulters can escape punishment with ease.
It is reasonable to assume that unless these looters and defaulters are brought to justice, the country will continue to witness the emergence of controversial business conglomerates like the S. Alam Group.
The country's defaulted loans have already reached a cascade of around Tk 5.44 lakh crore, and more than half of the top 20 defaulters belong to the Chattogram-based S. Alam Group, owned by Mohammad Saiful Alam, who has become a widely discussed business tycoon because of his ill-gotten gains from the country's banking sector.
The government, however, appears to be fully aware of the gravity of the situation. It has already launched an anti-corruption drive under which assets worth around Tk 723.43 billion have been frozen at home and abroad in connection with 11 priority cases as of May this year. The government has also sent 23 Mutual Legal Assistance Requests to authorities in 13 countries to recover laundered money, while civil proceedings have been initiated against six major defaulting business groups.
The people of the country now pin their hopes on the government to restore public trust in the banking sector by demonstrating a firm commitment to ensuring that willful defaulters, whoever they may be, are brought to justice and do not escape punishment.
