Dhaka: Bangladesh Bank Governor Ahsan H Mansur at a high-level meeting today informed that inflation has dropped significantly - from 12.5 percent to 8.3 percent in the recent months. 'We cannot restore the overall health of the banking sector properly yet, though ongoing reforms are gradually showing progress. But, some positive outcomes are already visible,' he said.
According to Bangladesh Sangbad Sangstha, the governor noted that Bangladesh now holds foreign exchange reserves equivalent to five months of imports. He highlighted that inflation could have decreased further to around 7 percent in the last one or two months, but a temporary rise in rice prices prevented that. The meeting of the National Steering Committee, which was formed to implement and monitor the smooth and sustainable transition strategy of Bangladesh from the LDC status, took place at the Chief Adviser's Office in the city's Tejgaon area. Chief Adviser Professor Muhammad Yunus chaired the meeting.
Chief Adviser's Press Secretary Shafiqul Alam later briefed the reporters at the Foreign Service Academy about the details of the meeting. Mansur mentioned that rice prices have started declining again and expressed hope that inflation would continue to fall in the coming days.
Addressing the issue of non-performing loans (NPLs), he stated that NPLs have reached around 24 percent, primarily due to widespread corruption and looting of banks during the previous government led by Sheikh Hasina. This situation adversely affected the banking sector's health. The governor reiterated that the increase in NPLs was mainly due to massive bank thefts and irregularities during the Sheikh Hasina regime, involving the embezzlement of millions of dollars. The central bank has now set a target to reduce NPLs from the current 24 percent to a level between 4 and 5 percent, Mansur added.
As part of financial sector restructuring, he announced that five Islamic banks would be merged, and nine non-banking financial institutions (NBFIs), also known as leasing companies, will be phased out. To foster innovation and entrepreneurship, a venture capital fund of Taka 900 crore is being established by commercial banks, with Bangladesh Bank contributing an additional Taka 600 crore.
Mansur also emphasized the need to promote a cashless transaction system in Bangladesh to boost revenue and reduce cash-handling costs. The meeting was attended by various advisers including Finance Adviser Dr Salehuddin Ahmed, Commerce Adviser Sk. Bashir Uddin, and others, along with prominent figures from the business community such as BGMEA President Mahmud Hasan Khan and FBCCI President Mahbubul Alam.