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 past year. Speaking at a seminar titled ‘Interim Government’s 365 Days’ organized by the Centre for Policy Dialogue (CPD), the governor noted that the sector was “right at the edge of the cliff” when the interim government assumed office in August last year.
According to Bangladesh Sangbad Sangstha, Labour and Shipping Adviser Brig Gen (retd) M Sakhawat Hossain participated in the dialogue as the chief guest, while CPD distinguished fellow Professor Mustafizur Rahman presided over it. Dr. Mansur highlighted the two main challenges faced by the interim government: stabilizing the macroeconomy and reforming the financial sector. Although reforms cannot be completed in a year, efforts have commenced in every area, he assured.
Upon assuming his role, Dr. Mansur conducted meetings with international financial institutions to maintain lines of credit, assuring them of the country’s commitment to repay all debts. He emphasized that Bangladesh’s situation did not deteriorate like that of Sri Lanka or Pakistan, attributing significant support in debt repayment to remittance inflows alongside export earnings over the past year.
Dr. Mansur reiterated that Bangladesh has never defaulted on its foreign payment obligations and expressed confidence that it would not do so in the future, despite accumulating dues that the country is committed to settling promptly. He pointed out the significant role remittances and exports played in supporting the economy and mentioned that every bank was instructed to meet its obligations.
Addressing inflation, the governor acknowledged it as a major challenge. Since August 14 last year, Bangladesh Bank has not sold a single dollar from reserves, opting instead to buy dollars at Taka 122 despite pressures to adjust the rate. Inflation has since fallen below 10%, with expectations of it dropping below 5% in the future. Although the balance of payments is now in surplus, the economy is yet to attract the desired level of investments, he noted.
Dr. Mansur also addressed the absence of a banking commission, explaining that three separate taskforces have been established to reform the banking sector, central bank operations, and recover laundered money. He identified recovering funds siphoned abroad as a significant challenge due to the need for coordination with multiple ministries.
Furthermore, the governor outlined major legal reforms underway, including amendments to the Bank Companies Act, fundamental changes to the Money Laundering Act to include asset recovery provisions, and broad revisions to the Bangladesh Bank Order to enhance the central bank’s accountability and autonomy. Amendments to the Deposit Insurance Act and the Money Loan Court Act are also planned to resolve long-standing loan default cases.
The central bank is also considering amending the Bangladesh Bank Resolution Ordinance to allow it to acquire banks facing liquidity crises due to irregularities, with a firm stance against leniency. Additionally, a single body is to be created for comprehensive monitoring of all banks to address irregularities in a coordinated manner.
Governor Mansur further emphasized initiatives to transition Bangladesh towards a cashless economy, which include promoting QR codes, expanding credit card usage, introducing nano-loans, providing banking education for school students, establishing Taka 200 student bank accounts, implementing housing reforms, restructuring the revenue department, and lowering smartphone prices to broaden digital banking coverage.