Dhaka: Finance Adviser Dr. Salehuddin Ahmed emphasized the prioritization of depositors’ interests in the banking sector, highlighting key corrective measures undertaken to address financial system irregularities. He urged stakeholders to adopt a balanced perspective, acknowledging the government’s commitment to correcting mistakes and restoring discipline.
According to Bangladesh Sangbad Sangstha, Dr. Salehuddin addressed reporters after a meeting of the Advisers Council Committee on Government Purchase at the Bangladesh Secretariat. He noted the government’s difficult decisions aimed at financial system stabilization, despite the discomfort such actions might entail. Drawing on his experience as the former Governor of Bangladesh Bank, he stressed the necessity of regulatory actions.
Dr. Salehuddin assured depositors of the government’s commitment to safeguarding their funds, affirming that those with deposits will receive their money. Reflecting on the interim administration’s 18-month tenure, he highlighted the stabilization of Bangladesh’s economy amidst significant pressures, marking a substantial achievement in the nation’s 54-year journey.
With a population increase from 75 million at independence to around 180 million today, Bangladesh has been described as a development test case. Despite challenges, it has emerged as a model in various respects. Addressing concerns about previous administrations’ economic management, Dr. Salehuddin highlighted institutional transparency and accountability weaknesses as factors contributing to systemic challenges.
He emphasized his commitment to avoiding improper discretionary authority use, particularly in issuing new bank licenses. Misallocation of credit and questionable lending decisions in the past led to economic distortions, with inflated asset pricing and judgment errors in fund allocation cited as key issues.
Proposals to amend the Bangladesh Bank Order and alter the governor’s status, according to Dr. Salehuddin, require structural reforms beyond symbolic changes. He stressed the need for comprehensive banking sector reforms and governance changes, advocating for autonomy to be matched with capability and accountability.
Addressing the technical complexities of compensating shareholders of troubled banks, Dr. Salehuddin explained that share values are affected when a bank’s net asset value becomes negative. While options for partial relief are being explored, he stressed the importance of careful financial calculations and proper assessment of asset values and liabilities.
Dr. Salehuddin concluded by emphasizing the time required for institutional reforms and the necessity of sustained efforts by future governments to consolidate progress and strengthen financial stability.