Weak governance and inadequate institutional performance have diminished public confidence in banks, leading many depositors to gravitate towards informal channels, members of the Monetary Policy Committee (MPC) highlighted during a recent gathering.
At the 12th MPC meeting convened at the Bangladesh Bank headquarters in Dhaka on June 21, the attendees emphasized the necessity for more robust actions to restore trust and incentivize individuals to redeposit their savings within the formal banking framework, as documented in the meeting records.
Led by BB Governor Md Mostaqur Rahman, the committee comprised key central bank officials and distinguished economists.
The committee underscored that deficiencies in systemic governance and institutional effectiveness had eroded trust in the banking industry, resulting in a shift of capital from conventional banks to informal avenues.
It stressed that rebuilding depositor trust and ensuring stringent depositor confidentiality were vital to fostering the reintegration of deposits into the official financial system.
Bangladesh’s economy continues to navigate a delicate and uneven recovery phase.
The committee noted that the central bank’s sustained contractionary monetary policy had effectively mitigated inflationary pressures.
