“When interest rates were fixed at 6% to 9%, they [businesses] applauded. When money was being siphoned off abroad, they remained silent. If business bodies behave like this, democracy can never become strong,” he says.
Bangladesh Bank Governor Ahsan H Mansur. TBS Sketch
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Bangladesh Bank Governor Ahsan H Mansur. TBS Sketch
Bangladesh Bank Governor Ahsan H Mansur today (27 January) criticised the role of business organisations during the previous Awami League government, saying they acted “like puppets” and failed to speak out on key economic issues.
“When interest rates were fixed at 6% to 9%, they [businesses] applauded. When money was being siphoned off abroad, they remained silent. If business bodies behave like this, democracy can never become strong,” he made the remarks at a roundtable in Dhaka.
The roundtable, titled “Implications of LDC Graduation for the Banking Industry: Bangladesh Perspective,” was organised by the International Chamber of Commerce (ICC) Bangladesh.
The event, moderated by ICC Bangladesh President Mahbubur Rahman, was attended by business leaders and bankers, many of whom argued in favour of delaying Bangladesh’s graduation from Least Developed Country (LDC) status.
Responding to those views, the governor said, “Bangladesh must prepare itself across all sectors for graduation. I do not see Bangladesh in the same category as countries like Afghanistan. We are now comparable to Thailand, Malaysia, or India.”
He further said LDC graduation is inevitable, whether today or tomorrow, and requires targeted policies for human resource development, monetary and financial systems. “Policies alone are not enough. Skills must be developed. Logistics, connectivity, ICT, education, and healthcare all need improvement. We should not sacrifice long-term gains for short-term benefits.”
Mansur acknowledged that interest rates are currently high but said, “Single-digit rates have historically been rare in Bangladesh. Between $20 billion and $25 billion had been drained from the banking system, leading to a rise in non-performing loans and inevitable tightening.”
“Deposit growth had fallen to 6% at one point, but it has now rebounded to 11%. This has had an impact on interest rates,” he said, adding that better governance, supervision, and customer confidence would help bring rates down.
“Reducing default loans will also help control inflation.”
The governor claimed that vested interest groups have become major obstacles to banking sector reforms. “Several laws had been sent to the interim government, including the Bank Resolution Ordinance and the Deposit Insurance Ordinance, both of which have already been passed.
“These laws have enabled the merger of five banks and initiated the liquidation process of nine NBFIs,” he said. However, he expressed frustration that the Bangladesh Bank Order remains stuck at the finance ministry despite being submitted nearly four months ago.
“This law is crucial to protecting institutions from future political interference,” he said. “If we want fundamental reform in the banking sector, we must resist groups that are trying to block these changes. Otherwise, we risk sliding back to where we were before.”
Ha-Meem Group Managing Director AK Azad also spoke at the event.
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