Compared to other peer countries, Bangladesh not only has more commercial banks, but it also faces several related issues. These issues include lack of capital, bad loans, and excessive interference by owners and directors. Additionally, there are issues of management ambiguity under the guise of excessive control by the central bank, lack of various services, weak risk management, and a crisis in leadership development.

Currently, there are 52 local commercial banks in Bangladesh, both public and private. Conversely, India, which is a much larger country both in terms of size and population, has 33 local banks. Over the past two decades, at least 40 banks have been reduced through mergers and acquisitions in the country. Ensuring corporate governance and reducing unnecessary banks have strengthened their banking sector. As a result, the rate of non-performing loans has also come down to around 2 per cent.

The contrasting picture in the number of banks between the two countries is not just a statistic; it primarily highlights the differences in banking philosophy, political will, and control capabilities between the two countries. The current government in our country has already expressed its interest in financial sector reform. In this context, the government needs to seek an answer to a question. Does the country need banks just for the sake of having banks, or is it necessary to establish a truly effective banking system?