B Mirror Report: Bangladesh’s banking sector has been under severe stress for years due to weak governance, political interference, regulatory shortcomings, and widespread loan defaults, raising serious concerns about financial stability and public confidence. Against this backdrop, The Financial Express organised a roundtable discussion titled “Banking Sector Reforms” to facilitate an in-depth dialogue on the urgency, direction, and sustainability of reform initiatives.
Finance Adviser Dr Salehuddin Ahmed attended the event as the chief guest, while Bangladesh Bank Governor Dr Ahsan H Mansur was present as the special guest. The session was chaired by The Financial Express Editor and CEO Shamsul Huq Zahid, with Professor Dr Shah Md. Ahsan Habib of the Bangladesh Institute of Bank Management (BIBM) presenting the keynote paper. FE’s Head of Online & Multimedia Shiabur Rahman moderated the discussion.
Speaking at the event, Dr Salehuddin Ahmed said the interim government is making a final push to implement long-pending reforms, particularly amendments to the Bank Company Act and the Bangladesh Bank Order, aimed at strengthening the autonomy of the central bank. He acknowledged that deep-rooted problems accumulated over nearly 15 years cannot be resolved overnight, but stressed that gradual progress is visible. Legal reforms, including amendments to the Money Laundering Prevention Act and the Artha Rin Adalat Ain, are underway to close long-standing loopholes and improve oversight.
Bangladesh Bank Governor Dr Ahsan H Mansur said the authorities opted for direct task forces instead of commissions to expedite reforms. Three task forces have been formed focusing on banking sector reform, central bank reform, and asset recovery. He highlighted the passage of laws on deposit insurance and bank resolution, noting that these measures are already being applied to banks and non-bank financial institutions. Emphasising accountability, he said joint investigation teams are addressing financial crimes, while future governments should consider establishing a National Crime Agency.
Participants from the banking sector, business community, and academia underscored the urgency of restoring credit discipline, transparency, and trust. Mahbubur Rahman, President of ICC Bangladesh, warned that rising non-performing loansnow exceeding one-third of total loans—pose serious risks to growth and investor confidence. He stressed that wilful defaulters must be dealt with firmly, while genuine businesses facing temporary stress should receive structured support.
Editors, bank chairmen, managing directors, and trade body leaders echoed concerns over weak corporate governance, political pressure on boards, regulatory gaps, and slow loan recovery due to legal bottlenecks. Several speakers called for board reforms, limits on tenure, faster judicial processes, forensic audits, and separation of criminal assets from regular business loans.
The keynote speaker, Dr Shah Md. Ahsan Habib, said emergency policy measures, tighter monetary stance, board restructuring, and mega mergers have helped stabilise the sector since mid-2024, but warned that reforms must continue under strong political commitment. He emphasised that central bank independence, institutional capacity, transparency, and skilled supervision are essential to prevent future crises.
The discussion concluded with a consensus that while recent reforms have prevented systemic collapse and restored some confidence, sustained reforms, legal enforcement, and an end to political interference are critical to building a resilient and credible banking system.
