Disequilibrium in Banking System: Challenges and Policy Recommendations

The banking sector's disequilibrium has emerged as a pervasive and enduring challenge within the nation's macroeconomic framework. A series of strategic missteps have plagued the banking sector over the preceding four decades, including: the absence of unified Central Bank oversight from the late 1960s until 1994, despite formal recognition (substantive supervision remained deficient), the premature privatization of the banking industry without adequate national economic preparation, the imposition of government expenditures on private and non-governmental banks, particularly to offset a portion of the budget deficit, the perpetuation of a traditional view of money as a private commodity (a primary factor exacerbating domestic inflation), and vacillation between disparate economic schools, shifting from socialist to capitalist ideologies.