Banking sector reform essential: Zahir Uddin Swapan

Information and Broadcasting Minister Zahir Uddin Swapan has emphasised that comprehensive reforms in the banking sector are unavoidable, stating there is “no way without” such changes.

He was speaking as the chief guest at a seminar titled ‘Good Governance and Role of Media in the Banking Sector’ organised by the Economic Reporters Forum (ERF) in Paltan, Dhaka, on Sunday.

The minister declared, “We will carry out reforms, changes and repairs in the banking sector. If we can talk about media reform, commission reform and administration reform in the anti-corruption sector, then why not reform this vital sector?”

The seminar was presided over by ERF President Daulat Akhter and hosted by General Secretary Abul Kashem. Keynote papers were presented by Daily Samakal Special Correspondent Obaidullah Rony and Prothom Alo Senior Reporter Sanaullah Shakib. 

Among those present were Bangladesh Bank Deputy Governor Nurun Nahar, BIBM Director General Dr Md. Ejazul Islam, Policy Exchange Bangladesh Chairman Dr Masrur Riaz, Dhaka University Professor Dr Md. Mashiur Rahman Zahid, and United Commercial Bank Managing Director and CEO Mohammad Mamdudur Rashid.

Swapan observed that good governance in the banking sector could not be achieved in isolation. 

He stressed that without overall good governance in the country’s political process and state institutions, discipline in banking would not be possible through media efforts alone. 

He criticised past practices of manipulating data and statistics for political gain, saying such distortions could not occur without state patronage.

Reflecting on the country’s economic history, he noted the expansion of the private sector following the economic liberalisation initiated by President Ziaur Rahman. 

He called for strengthening the stock market rather than relying solely on banks for capital. He also pointed out that the same groups responsible for embezzling bank deposits had similarly defrauded small investors in the stock market.

United Commercial Bank Managing Director Mamdudur Rashid acknowledged the critical importance of the banking sector to Bangladesh’s economy and society. 

He noted that many banks, including UCB, were facing financial pressure primarily due to a lack of good governance, while well-governed institutions had managed to remain resilient.

The Information Minister outlined three fundamental elements of good governance: accountability of both boards and management; transparency in presenting the true financial condition of banks; and ethics. 

He highlighted how political influence and vested interests had undermined ethical standards and risk management, contributing to the current crisis.

He pointed out that the reported non-performing loan ratio in the banking sector had risen from 11 per cent in 2023 to 25 per cent in 2024 and 35 per cent in 2025, attributing the increase largely to the central bank’s push for transparent disclosure of the real situation accumulated over years.

The seminar concluded that the banking sector has financed much of the country’s economic development, as the capital market and bond market have not met expectations. 

Restoring public trust through accountability, transparency, and strict regulatory enforcement is essential. 

Media, as the fourth pillar of the state, has a vital role in promoting good governance and curbing corruption, despite occasional government resistance.

It was noted that at least 20 of the country’s 34 financial institutions have struggled to return deposits on time since 2019, with at least 14 banks currently facing similar difficulties. 

Without urgent good governance measures, the situation risks escalating into a broader economic crisis, he said.