Dhaka: Dr Rashed Al Mahmud Titumir, Prime Minister's adviser on the Ministries of Finance and Planning, emphasized today that the government is committed to maintaining the autonomy of the Bangladesh Bank (BB) by shifting from dictating its operations to fostering policy coordination. He noted the need for financial independence in light of past economic mismanagement that resulted in the looting of public resources and a credit rating downgrade by the IMF and other international agencies. Titumir clarified that the government's approach would focus on synchronizing fiscal and monetary policies rather than exerting control over the central bank.
According to Bangladesh Sangbad Sangstha, Titumir made these remarks during a Focus Group Discussion (FGD) titled 'Synergizing Banking Sector: Lenders' and Borrowers' Perspective,' organized by the Dhaka Chamber of Commerce and Industry (DCCI) at its conference room. DCCI President Taskeen Ahmed delivered the welcome remarks and keynote presentation, while panelists included prominent figures like Md Zahidul Islam from Walton Hi-tech Industries PLC, Ashanur Rahman from City Bank PLC, M. Shamsul Arefin from NCC Bank PLC, Nawshad Mustafa from Bangladesh Bank, and Abdul Hai Sarkar from the Bangladesh Association of Banks.
In his speech, Titumir outlined that the Governor of Bangladesh Bank has initiated a program aimed at economic recovery and reconstruction. The new agenda moves away from traditional management styles to focus on growth and employment generation, expanding beyond price and financial stability objectives. To address the current economic challenges, the central bank plans to implement targeted initiatives such as Targeted Refinancing and Performance-Based Stimulus.
Titumir criticized previous COVID-19 stimulus packages for benefiting those with political connections rather than productive sectors. He advocated for performance-based stimulus packages and mentioned that the government and Bangladesh Bank are exploring Credit Guarantee Schemes and joint funds to support industrial sectors lacking adequate assets.
Taskeen Ahmed's presentation highlighted a paradox in the national banking sector, where excess liquidity coexists with a slowdown in private sector credit. He pointed out the challenges facing lenders and borrowers, urging for a synergy framework to restore economic stability. Despite the banking sector holding Taka 626,044.90 crore in liquid assets, private sector credit growth has slowed, with banks accumulating liquidity as a buffer against perceived risks.
Ahmed proposed a three-pillar Synergy Framework focusing on system stabilization, credit expansion and equalization, and governance reform. He emphasized the need for strict NPL targets and prosecuting willful defaulters to address the crisis of risk perception and credit allocation dysfunction, which he identified as critical to preventing further economic slowdown.