Editorial
Issue is professionalism in NCBs
Politicised boards breed corruption
Bangladesh Bank (BB) governor's request to the finance ministry to recast Sonali Bank's board of directors has sparked a tiff with the minister who thinks it is not within the central bank's remit to make such a recommendation.
Furthermore, the finance minister pointed to the central bank's failure to arrest the alleged loan scam involving the Hallmark group.
We don't want be drawn into a perceptual or semantic debate over who has authority over what or who is responsible for the present misgovernance with NCBs.
More pertinently, we would highlight the issue of how the Boards of Directors of nationalised banks are constituted and who get to man them.
Experience tells us that usually political appointees from the ruling party make up such boards. In the appointment of the board members, little, if anything, about their background, for example, their professional experience, competence or personal probity is taken into consideration with due diligence. Political loyalty remains the criterion.
Consequently, such boards do the bidding of the ruling party when sanctioning loans, which lies at the heart of corruption and malpractice. Even the internal appointments may bear the stamp of political meddling.
In the process, transparency and accountability of the board of directors as well as the nationalised banks as a whole can be called into question every step of the way.
As a matter of fact, the supervisory role of the Bangladesh Bank or the finance ministry, for that matter, is negated at the root of the whole system.
At issue is the governance of the nationalised banks as such. Trading of blames or conflict over jurisdictions is simply rhetoric, so long as the banks' boards are not constituted of professional people of proven integrity, with banking experience and competence.
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