Dhaka: Listing a series of measures taken by the central bank after the changeover of power last year, Bangladesh Bank Governor Dr. Ahsan H Mansur today stated that the country’s banking sector has managed to pull back from the brink over the last year. Speaking at a seminar titled ‘Interim Government’s 365 Days’ organised by the Centre for Policy Dialogue (CPD), the governor highlighted that the sector was ‘right at the edge of the cliff’ when the interim government took office in August last year.
According to Bangladesh Sangbad Sangstha, the seminar included prominent figures such as Labour and Shipping Adviser Brig Gen (retd) M Sakhawat Hossain, who spoke as the chief guest, and CPD distinguished fellow Professor Mustafizur Rahman, who presided over the event. Dr. Mansur elaborated on the central bank’s focus on stabilising the macroeconomy and reforming the financial sector, acknowledging that while reforms cannot be achieved in just a year, significant steps have been initiated across various areas.
Upon assuming his role, Dr. Mansur engaged with international financial institutions to secure lines of credit, assuring them of Bangladesh’s commitment to repaying its debts. He emphasized that the country avoided a financial crisis similar to that faced by Sri Lanka or Pakistan. The governor attributed substantial debt repayment support to remittance inflows and export earnings over the past year.
Dr. Mansur underscored Bangladesh’s strong track record of meeting foreign payment obligations, noting that while the country had accumulated dues, it had made commitments to clear them swiftly. He highlighted the vital role of remittances and improved export performance in bolstering the economy, with every bank instructed to fulfill its obligations.
Addressing inflation, Dr. Mansur acknowledged it as a significant challenge. Since August 14 of the previous year, Bangladesh Bank has refrained from selling dollars from reserves, opting instead to purchase dollars at Taka 122 despite pressure to adjust the rate. As a result, inflation has decreased to below 10%, with expectations of further reduction to below 5% in the future.
While the balance of payments is now in surplus, Dr. Mansur noted that the economy has yet to attract the desired level of investments. He explained that instead of forming a banking commission, three separate taskforces have been established to reform the banking sector, central bank operations, and recover laundered money. Recovering funds siphoned abroad remains a formidable challenge due to the need for coordination with multiple ministries.
The governor outlined major legal reforms underway, including amendments to the Bank Companies Act, the Money Laundering Act, and the Bangladesh Bank Order. These reforms aim to enhance accountability and autonomy, and address long-standing loan default cases. Amendments will also be made to the Deposit Insurance Act and the Money Loan Court Act.
Dr. Mansur revealed plans to amend the Bangladesh Bank Resolution Ordinance to enable the central bank to acquire banks facing liquidity crises due to irregularities, emphasizing a zero-tolerance approach. Additionally, a single body will be created for comprehensive monitoring of all banks to address irregularities effectively.
The governor also stressed initiatives to transition Bangladesh towards a cashless economy, advocating for the use of QR codes, expanded credit card usage, nano-loans, banking education for students, and the introduction of Taka 200 student bank accounts. Other initiatives include housing reforms, revenue department restructuring, and lowering smartphone prices to broaden digital banking access.