The word maya originates from Sanskrit, meaning attraction that you feel for your loved ones with a sense of bond and attachment. In the battlefield of Kurukshetra, when Arjun decided not to fight against his relatives, Sri Krishna defined Arjun's averseness as an outcome of 'maya' – an illusion that often prevents us from performing righteous acts. After a few thousand years, the concept of 'maya' seems to have obtained a new interpretation by bank owners, who have finally succeeded in convincing government officials to realise that owners have the maximum maya or sense of attachment for their banks. This is why it seems that the cabinet division has approved the change in the Banking Company Act to dictate that four family members (instead of two) can now be on the bank's Board of Directors virtually until death with short vacations (to further elaborate, the directors can serve the post nine years in three phases with a three year break after each term). This is reminiscent of the Permanent Settlement in India by Lord Cornwallis in 1793.  

The government seemingly has unfathomable maya for the super-rich, who allegedly aggravated the default culture mainly in state-owned banks and are now slowly encroaching upon private banks. Not only will this damage corporate professionalism, but will create an oligarchy in the banking industry by weakening the central bank even further. It is unfortunate to see how even government officials now parrot the voice of business tycoons and justify their ever aggressive greed for wealth and control in the name of maya. Who owns a bank? Mostly, the depositors. If this so-called maya is a prerequisite to occupy a directorship, would we be able to accommodate millions of depositors on the board? Let us not transform corporations into family clubs. Let us not damage institutions further. 

A country has broadly two development paths: capital market-led and bank-led. We have already suffocated capital-market institutions by indulging scams and not punishing the real culprits. An anaemic capital market contrasting commendable economic growth is a terrible irony for the nation. Bengalis like to stand on hope and till now, we did so by looking at the banking sector. But our state-owned banks have already been wrecked and hence, our last hope resides in private banks which have been doing well mainly due to the seasoned expertise of the Managing Directors (MDs) and their diligent employees.  

Thousands of business graduates would like to see growing professionalism in the banking sector. Any familial image imposed on a bank could thus deter these young people from performing their best. They cannot be expected to sideline their ambitions for the sake of the growth of a family. The familial monopoly over private banks will surely squeeze the space of independent decision making, committing more harm than good to the private banking sector. This is an ill-fated move that will push the country backward in corporate governance.  

While the management of state-owned banks is already in shambles, the government should not have succumbed to such pressures from the businesspersons to debilitate the functioning of the private banks where CEOs are already displeased at the ever-growing interference of their chairs and directors.  Previously, directors would allow more freedom to MDs to act independently for the betterment of the institution. Now many chairs and directors visit the premises every other day, send slips to MDs to recruit their nephews and in-laws, dictate marketing decisions, and finally impose indirect threats on MDs to earn 'that amount of profit' at the end of the year.  

These acts emanating from the maya-culture make MDs fiercely competitive with other peers to show profit at any cost. Who bears the brunt? The bank employees. Despite instructions from the central bank to not retain the staff, particularly women workers, in office after 6 pm, MDs overexploit the employees – a pattern that has reduced the expected growth of recruitment at private banks. This shows how a bad policy can ruin the corporate culture, kill employment opportunities, and finally hurt the economy.  

While an economy like Australia can run on mainly four banks, how many banks do we need? They are mushrooming like germs. Does Bangladesh need around 40 private banks? Surprisingly, more are in the pipeline. Bengalis are notoriously bad at making profits under a healthy corporate ambience. And as part of that habit, they like to convert corporate banks into family clubs. Well, there are other types of businesses that entertain family dynasties. Why then are they so interested in banks? The reason is simple. Banks can act as sources for plundering money. Excessive family clout in the management will most likely ensure this. And this leads to the emergence of 'the new maya theory,' which the government seems to have swallowed without knowing how poisonous it could be in the long run.  

We are at least happy to see that Bangladesh Bank from its professional judgment opposed this maya-prone move of increasing the number of family directors. But how far can they go? The ministries want to see the central bank as a 'good boy' with no disagreement in any aspects, no matter how self-defeating the policies the ministries advocate under the direct influence of the tycoon syndicate.  One senior government official consoled us by saying that Bangladesh Bank will have an option to say yes or no in the selection of directors. Bangladesh Bank has to say approve any decisions initiated at the ministries, which are accustomed to seeing the central bank as a compliant wing of the Secretariat, regarding the banking sector.  

Let us hope the neo maya theory will not be approved. Conscious parliamentarians, though mostly businesspersons, will strongly debate over the issue and prevent this anti-market move from being passed, because it will be a state-sponsored stimulus to manufacturing the super-rich. Pakistani rulers had deliberately patronised the growth of 22 families. We do not want to see the same culture, adding only two 'zeroes' after 22. An independently powerful central bank and a competitive private banking sector, with fewer family members on the board, are essential ingredients to guard corporate governance, to reduce the default culture, and to stimulate vibrancy in the domain of private investment. 

The writer is associate professor of economics and finance at the State University New York at Cortland and guest faculty at the Institute of Business Administration (IBA), Dhaka University. 

Email: birupakshapaul@gmail.com