A top banking leader thinks Bangladesh has way more banks than it needs. Abdul Hai Sarker runs the Bangladesh Association of Banks and also leads Dhaka Bank. He wonders if the country really needs over 60 banks for its economy size. The banking chief says this happened because licenses kept getting handed out for political reasons rather than business needs. He believes many approvals came from politics instead of what the economy actually required.
Bangladesh started with just four or five government banks years ago. The country later allowed four private banks to open up first. Another ten banks got permission after that initial group. Sarker says the licensing process went out of control from there. He thinks business groups should form cooperatives if they need internal money arrangements rather than starting full banks.
The nation currently operates 62 banks alongside more than 100 non-bank financial companies. Several foreign bank branches also work there. Sarker stressed that customer trust matters most for any bank to survive. Banks will fail if people lose confidence in them. Even pumping more money into troubled banks cannot bring back lost customer trust once it disappears.
Bangladesh started with just four or five government banks years ago. The country later allowed four private banks to open up first. Another ten banks got permission after that initial group. Sarker says the licensing process went out of control from there. He thinks business groups should form cooperatives if they need internal money arrangements rather than starting full banks.
The nation currently operates 62 banks alongside more than 100 non-bank financial companies. Several foreign bank branches also work there. Sarker stressed that customer trust matters most for any bank to survive. Banks will fail if people lose confidence in them. Even pumping more money into troubled banks cannot bring back lost customer trust once it disappears.
