The government is going to form soon a commission tasked with plugging loopholes in the financial sectors marred by scandals in the past three years.
Instituting the proposed commission for identifying maladies in the capital market and banking and insurance sectors is almost at its final stage, said finance ministry officials.
An economist or a former central bank governor is expected to head the commission as a series of high-profile crimes in the past couple of years shook the country’s entire financial system, they said.
After the worst-ever share market scam in early 2011 had rendered thousands of marginalised investors penniless, the Bangladesh Bank detected laundering of Tk 3,799 crore by the multi-level marketing company Destiny Group through illegal banking and a fake tree plantation programme in early 2012.
However, the just concluded year will be on record because of the single biggest fund embezzlement of Tk 3,600 crore by the little-known Hallmark Group from a branch of the state-owned Sonali Bank.
Finance secretary Fazle Kabir told New Age on Saturday that a concept paper that included the terms of reference of the proposed commission had already been submitted to finance minister Abul Maaal Abdul Muhith for approval.
‘The finance minister, who is now in the Indian City of Kolkatta, will set the next course of action after returning to Dhaka next week,’ he said, adding that the minister would select the head and other members of the commission.
The finance ministry macroeconomic wing prepared the terms of reference of the commission in light of the directives given by Muhith a couple of months ago.
A senior official of the wing said the main task of the commission would be finding out the weaknesses of the financial sectors and coming up with remedial recommendations.
The commission might be given a year to finish the job, he said.
But an official of the banking division of the same ministry said one year would not be sufficient for carrying out the task. It will take at least two years as the capital market and banking, non-banking, financial, and insurance sectors have advanced much over the years while corruption and forgery have also mushroomed, he said.
Economists and bankers have already urged the government to form a commission to fortify the fundamentals of the financial sector ­– a must for the economy.
Centre for Policy Dialogue distinguished fellow Debapriya Bhattacharya said the country’s banking sector had advanced significantly over the past two to three decades but it was lagging behind in establishing good governance.
Former Bangladesh Bank governor Salehuddin Ahmed said the government should enact the Financial Reporting Act to deter the banks and other companies from coming up with false reports.
He said a special law should be enacted to tackle the financial fraud cases.
Finance ministry officials said the proposed commission would be the first its kind in the country. Earlier, a number of commissions were set up to work solely on the banking sector.
The government in 1982 ran the first reform programme in the banking sector just before allowing operation of local private banks and privatising two state-owned banks.
Four years later, the second commission was formed and the third one, headed by economist Wahiduddin Mahmud, was formed in 1996 to lead more banking sector reforms.