Finance Adviser Salehuddin Ahmed has disclosed that the International Monetary Fund (IMF) now estimates Bangladesh requires $35 billion to restructure its troubled banking sector, nearly double its earlier projection of $18 billion.
Speaking at the launch of Dr Hossain Zillur Rahman’s book Orthoniti, Shashon O Khomota: Japito Jiboner Alekkho at the CIRDAP auditorium on Saturday, Ahmed said the revised figure reflects the deepening crisis in the financial system.
“When the interim government took charge last August, the economy was already teetering on the brink of collapse,” he said. “Eighty per cent of the banking sector’s funds had been siphoned off. If the total outstanding balance in banks was Tk 20,000 crore, Tk 16,000 crore had already been lost.”
Ahmed warned that many financial institutions remain in a state of disarray, with the system itself “severely damaged” and struggling to function effectively.
Acknowledging that sweeping changes are necessary, he pointed out the difficulty of reforming a sector still controlled by those responsible for its deterioration. “The same individuals who oversaw this collapse are still in charge. While some call for their complete replacement, that’s not a practical solution. We are trying to drive improvements, either through persuasion or strict measures,” he said.
Ahmed further noted that banking reforms alone will not suffice, stressing the need for political reforms to ensure proper checks and balances on the powers of the prime minister and Members of Parliament.
“Without reforms in both the banking sector and political structure, no effort will be sufficient to reverse the damage,” he concluded.