Jamaat-e-Islami has submitted a comprehensive set of reform proposals for the banking sector, recommending a reduction in the powers of bank boards of directors in loan approvals and management, the establishment of a central collateral registration system, and stricter limits on credit facilities for defaulted borrowers.
The proposals were presented during the fourth meeting of Standing Committee on the Ministry of Finance under 13th Jatiya Sangsad, held at Parliament on Sunday under the chairmanship of Mushfiqur Rahman.
Briefing journalists after the meeting, Jamaat leader and Dhaka-12 lawmaker Saiful Alam Khan Milon outlined the party’s recommendations.
Restricting board powers and fixing accountability
Proposing a reduced role for bank boards of directors in approving loans, Saiful Alam Khan Milon stated, “We do not want to leave the responsibility of bank investments or loans, whichever you call it, with the board of directors.”
He suggested that bank officials be tasked with approving loans based on specific criteria, while large loans should be scrutinised by a professional credit committee prior to obtaining approval from senior management, alongside strengthening internal control systems.
Highlighting accountability in cases of loan irregularities, Saiful emphasised the need to ensure the joint responsibility of both boards of directors and relevant officials. He noted, “When cases are filed, officers get caught, but directors do not.”
Jamaat also proposed recording all telephonic communications between central bank supervisory officials and commercial banks.
“Telephone conversations of the Bangladesh Bank Governor, Deputy Governors, and other officers involved in commercial bank supervision must be recorded,” Saiful stated.
Collateral registry and shareholding limits
To prevent the use of the same collateral to secure loans across multiple banks, the party recommended establishing a central collateral registration system.
Moreover, to control the excessive influence of a single family over bank ownership and management, Saiful proposed setting limits on the shareholding of an individual and their close family members.
“It must be determined what percentage of commercial bank shares an individual and their close family members can hold,” he said.
The party further recommended mandatory disclosures of shares and other investments for Members of Parliament, ministers, state ministers, or individuals holding equivalent posts prior to elections.
Crackdown on defaulters, forensic audits
On defaulted borrowers, Saiful stressed closing opportunities to take new loans or facilities from other banks, calling for stricter loan classification methods and the identification of wilful defaulters.
He also highlighted the necessity of forensic audits to assess the true financial condition of banks and determine actual non-performing loans (NPLs), stating, “Forensic audits must be conducted.”
In addition, Jamaat proposed reducing the total number of banks operating in the country, with Saiful remarking, “We do not need so many banks in a country of this size”.
The party’s other proposals include giving priority to lending in the Small and Medium Enterprise (SME) and agriculture sectors, addressing fund transfers through business offices abroad, and requiring Bangladesh Bank approval for the removal of management-level officials in banks.
