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Dhaka Bank PLC Chairman Abdul Hai Sarker, also head of the Bangladesh Association of Banks, asserts that customer distrust, rather than liquidity shortages, poses the greatest threat to Bangladesh’s banking industry. Speaking to The Financial Express on the eve of Dhaka Bank’s 30th anniversary, Sarker warned that without public confidence, no amount of regulatory or shareholder support can rescue a troubled institution.

Customer Confidence at the Forefront

“Once we fail, we are finished. That is why our customers maintain faith in our services even during turbulent times,” Sarker said. He highlighted that, in three decades, no Dhaka Bank customer has ever been unable to access funds.

He urged all stakeholders—banks, regulators, and the media—to collaborate in restoring trust. “Irresponsible reporting can spread disinformation and panic among depositors,” he cautioned.

Digital Evolution with Stability

Sarker outlined Dhaka Bank’s roadmap to a fully paperless operation, emphasizing gradual, sustainable adoption of cutting-edge digital technologies. “Financial transformation should be evolutionary, not revolutionary, so both bankers and customers can adapt smoothly,” he noted.

Non-Performing Loans and Recovery Woes

Dhaka Bank’s classified loans remain under 5%, but 80% of defaulters have absconded or left the country since the political transition. “Shareholders are sacrificing profits to meet provisioning requirements,” Sarker revealed.

Cautious Licensing and Bank Resolution

Criticizing the proliferation of new bank licences, he called for more responsible issuance to avoid sectoral strain. He also advised the government to prioritise reforming government-owned banks under the proposed Bank Resolution Ordinance before expanding intervention powers.

Strengthening Legal Framework

On planned amendments to the Bank Company Act, Sarker urged closing legal loopholes that enable loan defaulters to escape penalties. “Eliminating such escape routes could boost bad loan recovery by 70%,” he asserted.

His remarks underscore the urgency of rebuilding customer trust as the foundation for a robust, resilient banking sector.