Efforts to grant Bangladesh Bank (BB) greater autonomy have hit a roadblock, as sources indicate a pushback from bureaucrats on the BB board. This challenge has caused a delay in the proposed amendments to the Bangladesh Bank Order of 1972, a move meant to empower the central bank to implement regulations more effectively.
The initiative to amend the longstanding law was on the agenda for the BB board’s meeting held on August 26, with the aim of obtaining approval before submitting it to the interim government. However, according to insiders, the agenda was not presented due to alleged resistance from government secretaries sitting on the nine-member board. These secretaries are said to have prevented the discussion, which led to the proposal not being approved.
The secretaries, however, denied these claims, stating that the matter was indeed discussed, but they had made observations on the proposed draft of the amended BB order. They suggested some corrections be made before the proposal could be brought up again at the next board meeting.
BB Governor Dr Ahsan H Mansur chairs the board, which also includes key figures such as Finance Division Secretary Dr. Md Khairuzzaman Mozumder, National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan, Financial Institutions Division (FID) Secretary Nazma Mobarek, former government secretary Mahbub Ahmed, economists Professor Rashed Al Mahmud Titumir and Dr Fahmida Khatun, private-sector representative AKM Aftab ul Islam, and BB Deputy Governor Dr Md Habibur Rahman.
A central bank official, speaking anonymously, explained that the BB order was the fifth agenda item during the meeting. When it came time to present the proposal, bureaucratic board members intervened, requesting further corrections. As a result, the discussion moved on to other topics, and the proposal failed to gain approval.
The official expressed frustration, citing a lack of cooperation from the bureaucrats and the silence of most board members. According to the official, aside from two economists, four current and former government secretaries sit on the board. He speculated that the reason for the silence of the remaining members could be a fear of facing non-cooperation in the future if they raised objections.
Other BB officials present at the meeting echoed similar views, pointing out that approval of the BB Order would grant the central bank more independence, reduce bureaucratic control, and enhance the status and salaries of central bankers, placing them above administrative officers. This shift, they believe, is why bureaucrats often oppose measures that would grant the central bank greater autonomy.
The next board meeting has not yet been scheduled, leaving the process in limbo.
“The delay is unfortunate, and we remain uncertain about when the next meeting will take place,” the central banker added.
Responding to the concerns, FID Secretary Nazma Mobarek denied the allegations of non-cooperation, stating that the agenda was discussed, but with certain observations made about the draft, which need to be addressed before presenting it again to the board.
NBR Chairman Md Abdur Rahman Khan explained that the draft of the amended BB Order is still being finalized. “The process is ongoing, and that is why it hasn’t been approved yet. There is no intentional delay,” he said.
Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, questioned why the board did not allow the presentation of the amendment, and why the other members remained silent. He expressed confusion over the lack of progress on the matter.
