Considering reality, 10 to 15 banks sufficient for country: Governor

Bangladesh Bank Governor Dr. Ahsan H. Mansur has stated that the country's banking sector has suffered severe damage due to poor governance, family-dominated control, and widespread irregularities. 

He estimated that $20–$25 billion was laundered abroad in recent years through these issues, with around Tk 3 lakh crore drained from the sector overall—much of it likely laundered.

Speaking as the chief guest at a public lecture seminar titled "Banking Sector: Current Status and Future Challenges" at Jagannath University's central auditorium on Wednesday, the Governor highlighted that Bangladesh currently has 61 banks—far more than necessary. 

In his view, considering practical realities, 10 to 15 banks would be sufficient. 

Reducing the number would make it easier to enforce strong governance and oversight.

He noted that the government plans to consolidate state-owned banks, reducing them to just two, while merging others to streamline the sector.

On non-performing loans (NPLs), Governor Mansur expressed optimism about lowering the NPL rate to 25% by March. 

However, he cautioned that without the issuance of a revised Bangladesh Bank Ordinance, the risk of renewed political interference in banking operations remains high.

The central bank is also advancing plans to establish a bank resolution fund, with Tk 30,000–40,000 crore to be deposited. 

This framework will extend beyond commercial banks to include non-bank financial institutions.

Jagannath University Vice-Chancellor Professor Dr. Rezaul Karim, speaking as a special guest, acknowledged the evident fragility of the banking sector and expressed confidence that ongoing initiatives would lead to sustained positive recovery.

Professor Dr. Sharif Mosharraf Hossain, Chairman of the Department of Economics, pointed out that rising loan defaults have curtailed bank lending, hindering investment. 

He stressed the need for stricter monitoring of the banking sector to better protect its interests and address broader economic challenges, including income inequality.

The seminar featured a welcome address by Mohammad Sharif Osman Hossain, Chairman of the Department of Economics at Jagannath University. 

It was presided over by Professor Dr. Mahbub Ullah, Convener of the Bangladesh Economic Association. Other attendees included Professor Dr. Md. Helal Uddin, Member Secretary of the Bangladesh Economic Association, along with deans, department chairs, faculty members, and other university representatives.