BB autonomy plan faces complex issues

Finance Adviser Salehuddin Ahmed said that there are several complex issues involved in approving the proposal aimed at strengthening Bangladesh Bank’s (BB) autonomy, and that they will be handled by the elected government.

“These are difficult decisions. It is not the job of the interim government to make such decisions. The next government will decide on these matters,” he said after a meeting of the Advisory Committee on Government Procurement yesterday.

Autonomy of the central bank does not mean changing the governor’s status to minister status. It involves several internal issues, such as changing the composition of the board, including members from the private sector, and ensuring that no government bureaucrats remain.

When asked, the finance adviser assessed his own performance over the past 18 months at more than 70 out of 100.

“I am pragmatic about this. I don’t beat my own drum,” he said, noting that there were many things he wanted to do but could not.

“I started many initiatives, but could not complete them. That is why I definitely cannot give myself a full 100 marks.”

Regarding the separation of the National Board of Revenue (NBR), he said the process has been initiated, but could not be completed.

The interim government has no political agenda behind these reforms, he stressed. These reforms were undertaken in the public interest and must be carried forward by the next government.

Speaking about the overall economic situation, the adviser said the interim government inherited a collapsed economy and managed to bring it to a stable position, though many challenges remain.

Economic activity and trade must accelerate. Otherwise, employment will not increase. Reducing inflation remains a challenge and cannot be addressed through monetary policy alone -- improvements on the supply side are also necessary.

He added that the banking sector continues to face significant challenges, with deep-rooted problems requiring tough measures.

The BB governor has taken steps in this regard, which are praiseworthy, but “praise alone is not enough,” the adviser said. There is still a shortage of credit supply and a lack of depositor confidence in the banking sector, although confidence has partially returned.

Regarding small shareholders of the five merged banks, he said the finance ministry is working on ways to compensate their losses. The issue is quite complex, and options such as providing shares in the new banks or offering some form of financial compensation are being considered.