Frustration is mounting inside Bangladesh Bank (BB) as two long awaited financial sector reform proposals remain stalled at the finance ministry, with only days left in the interim government’s tenure.
Leaders of the BB Officers’ Welfare Council said there has been no visible progress on amendments to the Bangladesh Bank Order 1972 and Bank Company Act.
They had expected the post-uprising administration to fast-track structural reforms to strengthen central bank autonomy and tighten banking oversight.
The draft amendments were prepared by central bank officials and revised before being sent to the ministry for further action.
Council leaders said the proposals have since remained stuck there for several months, raising concern among officers who had hoped the reforms would address long standing weaknesses in governance and lending discipline.
They voiced their dissatisfaction at a press conference at the central bank headquarters on Thursday.
Nawshad Mustafa, a director of Bangladesh Bank and a council leader, said the current leadership lineup should have been well placed to deliver the reforms. He noted that the governor is widely regarded as macroeconomically sound, the finance adviser is a former successful central bank governor and the chief adviser of the interim government is a Nobel laureate with global recognition.
“We had huge expectations from this team to get such important changes approved. But that has not happened yet. We are frustrated to some extent, though we are still hopeful that quick measures will be taken in the next few days,” he said.
Golam Mostafa Srabon, general secretary of the council, said full autonomy of the banking regulator is essential to restore discipline in the financial sector and prevent political interference in regulatory decisions, something officers say they have witnessed repeatedly in the past.
Referring to the structure of the central bank board, he said it now lacks professional directors and is dominated by government representatives. When the Bangladesh Bank Order was enacted in 1972, he said, there had been only one government representative on the board and that person had no voting rights.
Citing regional precedent, he pointed to Central Bank of Sri Lanka, saying that after Sri Lanka’s recent political upheaval the government removed its lone representative from the central bank board.
The council also demanded an end to what it described as a prolonged stalemate in recruitment and promotion of Bangladesh Bank officials. It called for the cancellation of appointments of advisers, consultants and contractual officials hired without what it termed proper evaluation and transparent recruitment procedures.
In addition, the body sought institutional protection for officials facing harassment while carrying out their duties. It urged the governor to devote more active attention to Bangladesh Bank’s internal policy matters and to avoid inconsistent or arbitrary public comments on central banking issues.
Md Bayazid Sarker, a director at the Banking Regulation and Policy Department, and AKM Masum Billah, president of the council, also addressed the press conference.
