‘Cenbank governor appointment clear breach of electoral commitment’
Through this appointment, what message is being conveyed nationally and internationally?
The newly appointed governor's experience in the banking sector is primarily related to being a borrower, later a loan defaulter, and subsequently benefiting from loan rescheduling under special consideration.
In addition, he has played significant roles as part of influential business lobbies, including the readymade garment sector, the real estate sector, ATAB, and the Dhaka Chamber.
The question is whether the governor appointed in haste will be able to fulfil public expectations of restoring the banking sector that fell into disarray during the authoritarian kleptocratic regime, remaining free from the influence of business lobbies, borrowers, and loan defaulters.
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Particularly in a context where nearly 60% of Members of Parliament and 62% of the Cabinet members are primarily businesspersons, and around 50% of MPs are loan defaulters with outstanding recoverable loans surpassing all previous records, how risky could the appointment of a loan-defaulting businessperson, with experience of obtaining loan rescheduling under special consideration and benefiting from policy capture in sectors such as the readymade garment industry and REHAB, be for the banking sector?
Through this appointment, what message is being conveyed nationally and internationally? We urge the government to reflect on these questions.
The government must also consider how prudent it was to entrust the central bank's leadership to a member of the election management committee of the ruling party. Moreover, the BNP, in its election manifesto, pledged to ensure good governance in the banking sector, discipline in financial institutions, and transparency and oversight.
Appointing an individual burdened with conflict of interest as governor of Bangladesh Bank constitutes a clear breach of that electoral commitment. The current government is well aware of the fragile state of the banking sector during the fallen authoritarian regime, when partisan considerations and facilitation of vested interest groups by the Bangladesh Bank contributed to large-scale money laundering, soaring defaulted loans, and overall economic vulnerability.
Dr Iftekharuzzaman is the Executive Director of Transparency International Bangladesh.
