BB governor wants legal reforms before polls, finance adviser ‘unsure’

Bangladesh Bank Governor Ahsan H Mansur yesterday urged Finance Adviser Salehuddin Ahmed to fast-track amendments to the Bangladesh Bank Order and the Bank Companies Act ahead of the national election.

In response, the adviser expressed doubt, saying he was “unsure” whether the two laws could be revised before the polls scheduled for February 12 this year.

The discussion took place at a roundtable on banking sector reforms, jointly organised by the English daily The Financial Express and Mutual Trust Bank at Six Seasons Hotel in Dhaka. 

Salehuddin Ahmed was the chief guest, while the governor attended as the special guest.

The event was also attended by managing directors of private and state-owned banks, alongside business leaders. Bankers and entrepreneurs put forward various suggestions and demands, with bank MDs backing the governor’s proposed reforms.

However, the finance adviser pointed to time constraints and his limitations. 

When the governor said that passing the laws after the election would be difficult, he replied, “We will try. However, the time is short, so we are not sure how much can be accomplished.”

On the independence of the central bank governor, he said it is definitely necessary. “But there is a lot of discussion about the governor’s status, whether the person should enjoy the status of a minister or not.”

Referring to the governor’s position, Ahmed said, “A governor is a governor. I do not understand why a governor should be a minister.”

The central bank governor said that seven laws or ordinances have been submitted to the government, but only two have been approved so far. These include the Bank Resolution Ordinance and the Deposit Protection Act.

He said amendments to the Money Loan Courts Act also needed urgent approval to support banking reforms, but the proposal has been returned for corrections.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said the Bangladesh Bank Order and Bank Companies Act should be approved before the election, as it will be harder to pass them afterwards.

Sarif Zahir, chairman of United Commercial Bank, criticised long-term policy support. He said some businesspeople have benefited for 12 years, which is illogical. 

“Finance companies provide loans for a maximum of six years, but under the policy support, borrowers are getting 12 years to repay loans,” he added.

Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI), said banking reforms are currently affecting the economy.

Syed Abu Naser Bukhtear Ahmed, chairman of Agrani Bank, said if the government plans to merge banks, it can do so. But it must be handled cautiously. 

“If it announces this publicly, there will be a bank run. We have seen how deposit withdrawals surged after the liquidation of some financial institutions was announced,” he added.

Shah Md Ahsan Habib, a professor at the Bangladesh Institute of Bank Management (BIBM), presented the keynote at the event. It was presided over by The Financial Express Editor Shamsul Huq Zahid.