Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Wednesday, October 18, 2017 07:08:34 PM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Privatization of SOBs not solution to mismanagement

By
21st-Mar-2017       
Comments
Share your thought
Post a comment »
Read all () »

THE continuous losses of State-Owned Banks (SOBs) prompted the government to consider privatising them all, expect one, said media report on Monday. Most State-Owned Banks are now sustaining on tax-payer-funded money. Finance Minister AMA Muhith discussed the government's thinking in presence of the Managing Directors of all seven State Owners Banks, Governor of Bangladesh Bank, and the Secretaries of Finance and Banking Divisions. They discussed the capital shortfall of five State-Run commercial banks and two State-Run specialised banks while the Finance Minister held the view that funding those banks from budgetary resources is slowing their recovery. Banks must operate on cost-benefit basis.

Last year, six State-Owned Banks posted operating profits of Tk 2,010 crore, down 37 percent from a year ago. After provisioning and tax payments, these banks registered a net loss of Tk 511 crore for the year, which was Tk 125 crore in 2015. Two other State-Owned Specialised banks -- Krishi Bank and Rajshahi Krishi Unnayan Bank -- counted Tk 418 crore in losses last year, against Tk 167 crore in 2015.

Privatising the State Banks has been a long-standing options and experts support the option saying banks must stay in business through competition. Last year, Mohammed Farashuddin, former central bank governor, and Sadiq Ahmed, former World Bank official called on the government to immediately privatise those banks and take drastic measures against public enterprises to stop them from bleeding the economy.

But privatization has mixed results. Revenues received from sale of public equities were modest (roughly 35% of the target of Rs. 78,300 crores were realised in the period 1991-92 to 2002-03) from the sale of public companies in India. In the UK too there have been mixed results. While privatization has improved the service quality of some services like water distribution, it has also resulted in tremendous job losses for specific sectors.

Privatisation failed to demonstrate that private companies are always more competent than State-Owned ones. It also failed to demonstrate that citizens would own shares. Rather the truth is that these banks will pass to the hands of wealthy and politically powerful people to give concentration of the national wealth to few hands. There is no guarantee that these banks will improve performance, rather capital flight may further grow in one hand and income gap between the rich and the poor will cause more socio-economic tension in the country.

So many believe that the solution is not in selling these banks to the rich, but improving the bank management free from political control. So long political leaders will influence loan sanctioning and their rescheduling, the situation will not improve. We must say that the government should prove its competence to run banks instead of handing them over to powerful syndicates.  


Tariff
Add Rate

News Archive

Inside The New Nation

Editorial »

Slow down in poverty reduction needs special attention


POVERTY reduction rate in the country is slowing down as calculated from data that to be revealed by Bangladesh Bureau of Statistics (BBS) in few days as per report in a national daily. The yearly average poverty reduction rate was estimated at 1.7 percent from 2005 and 2010 and it ...

International »

US official not ruling out eventual direct talks with N Korea


Reuters, Tokyo :The United States is not ruling out the eventual possibility of direct talks with North Korea, Deputy Secretary of State John J. Sullivan said on Tuesday, hours after Pyongyang warned nuclear war might break out at any moment.Talks between the adversaries have long been urged by China in ...

International »

US 'not taking sides' between Iraqi forces, Kurds: Trump


Washington is "not taking sides" following clashes between Iraqi forces and the country's Kurds, US President Donald Trump said Monday, as tensions escalate following the autonomous Kurdish region's independence referendum.Speaking after Iraqi troops and tanks swept across the northern province capturing oil and military targets from the Kurds and seizing ...

Entertainment »

Deepika the new age Dream Girl: Hema Malini


Deepika Padukone recently made time to launch the biography that was being launched on Hema Malini at a suburban hotel. Hema Malini’s birthday was a big affair for the yesteryear actress as well as her fans, as it saw the unveiling of her biography. The Dream Girl of the golden ...

Entertainment »

Gauri Khan plays a hostto Aamir Khan at Gauri Khan Designs


Aamir Khan recently visited close friend Shah Rukh Khan’s wife Gauri Khan’s store in the suburbs of Mumbai. The actor took out time from the promotions of his upcoming film Secret Superstar to visit the newly opened artistic store which provides imaginative and creative designs and decor. Gauri Khan has ...

City »

Newly appointed European Union Envoy to Dhaka Mrs. Rensje Teerink presents credentials to President Abdul Hamid at Bangabhaban on Tuesday.


Editorial »

Rohingya crisis posing big threat to national economy


BANGLADESH economy is facing real challenge as the Rohingya crisis is deepening with the exodus of the homeless in thousands daily to demand more allocation of budgetary resources to give them shelter. It is causing destruction to local infrastructure, bringing enormous pressure on education and health care services and pushing ...

Sports »

Players of Toronto FC celebrate with the Supporters` Shield following their win over the Montreal Impact in MLS soccer game action in Toronto on Sunday.


Entertainment »

Vaani Kapoor scorching the screen with her hot moves


It was not long time back when Vaani Kapoor sizzled the screen with her sexy moves in Nashe Si Chad Gayi from Befikre. The song was a massive hit and it created lots of buzz because of the sizzling chemistry between Vaani and Ranveer Singh. Now Vaani is back with ...

City »

Neuro Spinal Society of Bangladesh brought out a mass awareness rally in the city on Monday marking World Spine Day.


International »

Iraqi forces seize territory from Kurds in independence dispute


AFP :Iraqi forces seized a key military base, an airport and an oil field from Kurdish fighters Monday in disputed Kirkuk province in a major operation sparked by a controversial independence referendum.The offensive, which follows weeks of soaring tensions between two US allies in the battle against the Islamic State ...

Editorial »

Ctg Port needs urgent expansion


THE number of containers handled at Chittagong Port is growing by 15-22 percent every year, but the Port is running its operations with the same quantity of jetties and yards it had 10 years back. Even worse, the New Mooring Container Terminals (NCTs) built in 2007 cannot run in full ...

Entertainment »

Aishwarya Rai was `100pc protected` from Harvey Weinstein, says Hollywood executive


A Hollywood executive who represented Bollywood star Aishwarya Rai Bachchan internationally in the 2000s has alleged that Harvey Weinstein, the movie mogul battling scores of sexual assault allegations, had once asked her after a meeting, “What do I have to do to get her alone?”“Kiss my black a**,” is what ...

City »

BFUJ President Manjurul Ahsan Bulbul, among others, at a roundtable on 'Role of Mass Media in Protecting Communal Harmony: Perspective Rohingya Crises ' organised by Buddhist Journal and Online Media Forum at the Jatiya Press Club on Sunday.


.

International »

California `horror` fires burn on, 40 dead in one week


Reuters, Santa Rosa  :Authorities hope weaker winds will help more than 10,000 firefighters battle the deadliest blazes in California history, which have killed at least 40 people and destroyed thousands of structures in one of the state's worst natural disasters in years.Fast-moving fires spread by shifting winds forced thousands more ...

 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news