Taskforce recommends keeping scam-hit banking sector free from political influence

A summary of the taskforce’s report has reached Chief Advisor Muhammad Yunus

A taskforce formed to redefine economic strategies for equitable, sustainable development and secure necessary resources has recommended freeing the scandal-ridden banking sector from political influence, citing financial irregularities during the ousted Awami League government.

Highlighting that a powerful vested group has undermined the banking sector for decades, its report says: “To eliminate this influence, Bangladesh Bank must be allowed to operate independently. No individual or group should be permitted to own multiple commercial banks. Politically motivated approvals for new bank licences must be halted, and an exit policy must be developed for poorly managed banks.”

A summary of the report has been handed to Chief Advisor Muhammad Yunus.

According to a press release from the Chief Advisor’s Office, Education and Planning Advisor Wahiduddin Mahmud submitted the report on Thursday.

Recommending the adoption of several pilot projects, the report notes that these proposals present a strategic framework for Bangladesh’s interim government, aimed at achieving economic growth, social development, and environmental sustainability.

Given inefficiencies in public service and environmental concerns, it underscores the need for targeted interventions that can bring lasting change.

The Awami League government was overthrown on Aug 5, 2024 following a student-led uprising.

During the Awami League’s 15-year rule, repeated irregularities, fraud, and undue influence facilitated siphoning off funds from banks and laundering them abroad, according to disclosures from the central bank.

As these disclosures came to light, worried depositors rushed to withdraw their money, exposing the hollowed-out state of some banks.

Further revelations about the dire condition of banks controlled by influential industrial groups and powerful businesspeople tied to the Awami League eroded public confidence in both the banking and broader financial sectors, spreading fear among ordinary citizens.

To assess the condition of the national economy, the interim government formed a White Paper Committee. Its report details corruption, plunder, and severe financial manipulation during Sheikh Hasina’s administration, indicating that at least 10 banks are on the brink of bankruptcy.

ADDITIONAL SECTORS UNDER SCRUTINY

In addition to banking-sector scandals, there were also widespread allegations of irregularities and corruption in various sectors—such as healthcare—during the previous government.

After Hasina’s fall from power, the interim government began its tenure with the aim of building an equitable Bangladesh. As part of its reform commitments across different areas, it formed the taskforce on Sept 10 to promote sustainable economic development.

Former director general of the Bangladesh Institute of Development Studies, or BIDS, Dr KAS Murshid, was appointed chair of the 12-strong taskforce. The Planning Commission’s Member (General Economics Division) Md Kausar Ahmed serves as Member Secretary.

Other members include former World Bank official Syed Akhtar Mahmood, Professor Selim Raihan of the Economics Department at Dhaka University, Abdur Razzaq, former head of research at the Commonwealth Secretariat, Professor Mushfiq Mobarak of economics at Yale University, Professor Shamsul Haque of BUET, Professor Rumana Huque of economics at Dhaka University, former president of the Metropolitan Chamber of Commerce and Industry Nasim Manzur, BIDS Research Director Dr Monzur Hossain, CPD Executive Director Fahmida Khatun and CEO of BDJobs.com A K M Fahim Mashroor.

Formed to establish a fair, sustainable, and dynamic economic foundation, the committee was tasked with preparing a preliminary comprehensive report within three months.

KEY REFORM RECOMMENDATIONS BEYOND BANKING

Beyond the banking sector, the taskforce’s report recommends reforms in several other areas, including public hospitals, rural schools and clinics, Bangladesh Road Transport Authority, or BRTA, a selected ministry, reviving the Buriganga River.

The report proposes choosing a specific public hospital in Dhaka for extensive reform.

Under this initiative, professional hospital administrators—rather than general administrators—would be appointed to run it, and a new board of directors would be formed.

A real-time monitoring dashboard would also be introduced to collect user complaints. Youth and civic groups would be able to monitor key performance indicators online.

REVIVING THE BURIGANGA RIVER

According to the report, the Buriganga River is on the verge of dying, posing a serious threat to Dhaka. The government must make immediate decisions, including enacting emergency legislation if necessary.

The taskforce emphasises the need for a special minister or advisor to lead this project with the help of experts and legal professionals. Since vested groups may resist, robust legal measures are essential to ensure the project’s protection.

REFORMING A SELECTED MINISTRY

The taskforce recommends choosing a specific ministry for a pilot performance monitoring system so that the progress of its various projects and activities can be tracked directly. The taskforce views this as an important step in enhancing government efficiency.

PROPOSALS FOR NEW INSTITUTIONS AND INITIATIVES

The report also proposes establishing several new entities, including a world-class educational institution, Biman Bangladesh Airlines revaluation, a centre for social and behavioural change communication and research, and a regulatory reform commission.

REVALUATING BIMAN

According to the report, the flag carrier has failed to meet modern aviation standards. Consequently, Biman must be run with performance-based targets. Should it continue to underperform, the report suggests using half of its assets to form a new entity temporarily called Bangladesh Airways, managed under international best practices.

CENTRE FOR SOCIAL AND BEHAVIOURAL CHANGE COMMUNICATION AND RESEARCH

The report notes that current promotional efforts by various government offices are fragmented. It recommends creating a centraliSed institution that would design research-based modern communication strategies and contribute to social change.

REGULATORY REFORM COMMISSION

To reduce unnecessary regulations and bureaucratic hurdles in business and investment, the report recommends forming an oversight commission that would regularly review policies and make reform proposals to the government.

The taskforce has put forward recommendations regarding urban transport initiatives, including the implementation of automated traffic signals and a unified bus service.

Several plans have also been proposed for the industrial, investment, and export sectors.

Key recommendations include supporting top exporters, enhancing one-stop services, encouraging foreign direct investment, or FDI, in the healthcare sector, promoting FDI in technology and technical education, strengthening economic diplomacy, and expanding labour exports.

A "cherry-picking winners" model has been suggested to support top exporters. Out of approximately 1,500 companies, promising exporters should be identified and provided with financial and technological assistance to foster new industries beyond readymade garments.

The report highlights the urgency of attracting foreign investment in healthcare due to the recent closure of Indian medical markets, which has created a critical demand for high-quality healthcare in Bangladesh. To address this, the government should facilitate direct foreign investment in tertiary healthcare services.

In economic diplomacy and labour export, the taskforce emphasises the need for bilateral agreements, strategic promotional campaigns, and cultural exports to secure new job markets for Bangladeshi workers.

Inclusive initiatives include expanding the use of digital and artificial intelligence, or AI, technology, reforming planning processes, establishing technological leadership, professionalising leadership, curbing daily extortion, enhancing government efficiency, creating a national ID-based open data platform, establishing an emergency reserve system, and eliminating political interference in the banking sector.

Regarding extortion prevention, the report states that citizens frequently encounter bribery when accessing basic services such as train tickets and passports. This issue extends beyond government services, affecting markets, transport, and the construction sector.

To tackle this, an independent "anti-gang squad" could be formed, either as a government-led initiative or operated by private entities with stringent security measures. Ensuring citizen and youth oversight is critical to its effectiveness.

To improve government efficiency, the taskforce suggests digitising office operations, reducing unnecessary formalities and protocol expenses, avoiding redundant infrastructure projects, and minimising excessive administrative meetings. These small but significant changes could enhance governance effectiveness.

On emergency reserves, the report notes that Bangladesh already maintains food stockpiles for food security. This should be expanded to include essential commodities such as diesel, fertilisers, and edible oil, which are subject to global price fluctuations.

While long-term solutions involve alternative energy sources like solar and wind power, domestic stockpiles can ensure short-term stability.

Additional recommendations include utilising abandoned land for solar energy, maximising the use of existing gas fields, regulating sand extraction, integrating government service call centres, establishing "Dhaka Haat" marketplaces, and reclassifying small and medium enterprises, or SMEs.

On gas field utilisation, the report is of the view that the simplest way to address the current gas crisis is to conduct full exploration and extraction from existing reserves. The Bangladesh Petroleum Exploration and Production Company Limited, or BAPEX, can undertake this initiative at a lower cost, reducing import dependency and enhancing energy security.

The taskforce warns that unregulated sand extraction, despite its high demand in the construction sector, has led to severe environmental degradation. Although the "Sand Quarry Act" was enacted in 2010, illegal sand mining continues in rivers, residential areas, and tea estates. The government must implement strict regulations based on scientific assessments to curb this issue.

To streamline government service accessibility, the report recommends consolidating multiple call centre numbers into a single general service number and an emergency hotline. Integrating AI technology could further enhance service efficiency and responsiveness.

According to the report, these recommendations form an initial roadmap for economic reform, aligned with the vision of a transformed Bangladesh that is responsive to public needs. By prioritising key projects in healthcare, education, and governance, the interim government can restore public trust and drive sustainable development.

The taskforce asserts that these proposals call for shared responsibility between policymakers and the public to build a better future. With strong leadership and strategic planning, Bangladesh can turn challenges into opportunities, ensuring a prosperous, equitable, and stable nation for current and future generations.