Bank sector needs Tk 60,000cr annually for up to 8 years: Bangladesh Bank governor

Bangladesh’s banking sector will require Tk 60,000 crore annually over the next five to eight years to cover the shortfall caused by the alleged siphoning of funds and to rebuild the troubled sector, Bangladesh Bank Governor Mostakur Rahman has said.He made the remarks on Saturday at a Bangla QR campaign event organised by ONE Bank at United International University (UIU) in Dhaka.“When we started working, we found that one-third of the money in the banking sector was missing. These funds were siphoned off over the past few years. This is a major problem for the sector,” the governor said.He added that depositors had been holding meetings and rallies at Bangladesh Bank and other places over the past several months to demand the return of their money, creating a major challenge for the authorities.The crisis emerged because public money was looted, he said, adding that initiatives had been taken to identify depositors’ problems and find ways to address them.A substantial amount of money belonging to depositors of Sammilito Islami Bank remains stuck, the governor said, noting that the process of returning their deposits had been simplified. He also said the problems involving National Bank had been resolved on Thursday.“We are resolving the problems, but we are doing so with your money and mine—with taxpayers’ money,” he said.Tk 60,000cr annual allocation proposedThe governor said Bangladesh Bank had submitted a proposal to the government to allocate Tk 60,000 crore annually from the national budget for the next five to eight years to restructure the banking sector.The proposed allocation would help cover the shortfall caused by the siphoning of funds and facilitate the repayment of depositors’ money.“Someone else took the money through looting, but now public money is being used to cover the shortfall. You and I are paying the penalty,” Mostakur said.Defaulters to face legal action from next yearThe governor said all possible assistance had been provided to loan defaulters to repay their outstanding bank loans within this year.However, those who fail to repay their loans despite the support will face legal action from next year, he warned.Bangla QR could raise tax-GDP ratio above 10%On revenue collection, Mostakur Rahman said the government’s revenue target for the 2026-27 fiscal year had been increased by Tk 2 lakh crore compared with the previous target.He expressed optimism that the target could be achieved if Bangla QR payments were fully introduced across the country.Bangladesh’s tax-to-GDP ratio is currently below 7%, he said. The ratio could rise above 10% if the Bangla QR system becomes fully operational.According to the governor, many businesses do not report all their transactions in their accounts. Introducing QR code-based payments would bring such transactions into the formal accounting system, creating opportunities to increase government revenue.Monitoring suspicious transactionsResponding to concerns about suspicious transactions through QR codes, the governor said such transactions also occurred in mobile financial services (MFS) and the banking sector.He added that Bangladesh Bank had mechanisms in place to identify suspicious transactions through these channels.UIU Vice-Chancellor Md Abul Kashem Mia, ONE Bank Managing Director Muhit Rahman and senior bank officials attended the event.