Bangladesh Bank (BB) has issued directives to 15 banks through its appointed observers and coordinators to enhance their financial stability. The directives emerged during a meeting presided over by the Bangladesh Bank Governor at the bank’s Motijheel headquarters. These observers and coordinators have been deployed to closely monitor the banks, specifically focusing on identifying irregularities and scams related to large loans.
The central bank, in an effort to address issues of corporate governance and financial health, began appointing observers in 1994. However, the financial conditions of some problem banks have continued to deteriorate despite the presence of observers. For instance, Janata Bank’s default loans have increased despite the presence of a central bank observer. Industry experts stress the need to ensure accountability among the observers and coordinators to effectively address corporate governance issues in banks. This move comes as part of ongoing efforts to rectify the financial health of these institutions.
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