Won’t bow to political pressure, reforms to continue: BB governor

The newly appointed Bangladesh Bank Governor Mostaqur Rahman has pledged to continue ongoing banking sector reforms without yielding to political pressure.

He made the remarks today (1 March) during a meeting with representatives of the Association of Bankers, Bangladesh (ABB), the organisation of top bank executives. Deputy governors, executive directors and managing directors of 19 banks were present.

Following the meeting, Mashrur Arefin, chairman of ABB, said reforms – including the reconstitution of boards at troubled banks – would proceed uninterrupted. “The new governor assured participants that he would not succumb to political influence.” 

Bank officials were asked to inform the governor directly if they faced interference in matters related to loan disbursement or governance, he added. The central bank would also act more swiftly on issues raised by ABB.

A managing director of a first-generation private bank who attended the meeting told The Business Standard that the governor made it clear that banking sector reforms would move forward consistently. 

He added that the central bank plans to gradually deregulate certain areas, beginning with allowing banks to independently enter into rent and leasing agreements under approved guidelines. 

“Measures will also be taken to ease the release of pending export incentives, EDF repayments and remittance incentives. He [governor] assured that efforts would be intensified to resolve issues raised by ABB to help lower operating costs,” he said.

Central bank spokesperson Arief Hossain Khan said the governor emphasised creating a business- and production-friendly environment, with a target of generating one crore new jobs. 

He also stressed the need to ensure productive use of distressed assets affected by non-performing loans, citing the reopening of shuttered factories for new production or service activities as an example.

The meeting also discussed the “One Village, One Product” initiative, he said. The governor provided guidance on how banks could help bring local products to global markets. 

Initiatives will be taken to set service standards and establish a rental framework for office space when opening new bank branches, reducing the need for repeated approvals from the central bank, he added.