Funding 'Yes' vote campaign from CSR funds was ethically justified: Ahsan H Mansur

Former Bangladesh Bank governor and economist Ahsan H Mansur has said that campaigning for a "Yes" vote in the referendum was an effort to legitimise the reforms initiated following the July movement. He argued that promoting a proposal put forward by the government was not a wrongdoing but rather a moral responsibility.

Speaking in an interview on Khaled Muhiuddin's programme Thikanay on Wednesday, Mansur discussed various challenges in Bangladesh's banking and financial sectors, political pressures and reform efforts.

Referring to the use of banks' Corporate Social Responsibility (CSR) funds for the referendum campaign, Mansur said he considered it "ethically justified".

"In my view, the advertisements did not ask people to vote for any specific individual. They simply sought public support for a package of 32 reforms. I do not see anything harmful in that campaign," he said.

Political pressure and loan defaulters

Mansur said many individuals who had become loan defaulters due to political victimisation were allowed to restructure their loans. The primary objective, he said, was to enable them to participate in elections.

He acknowledged that many beneficiaries of the facility were influential politicians, some of whom are now ministers.

Without naming anyone, he said that during the Sheikh Hasina regime some businesses had their gas and electricity connections disconnected for political reasons, severely affecting their operations. Without restructuring facilities, those individuals would not have been able to contest elections, he added.

Mansur said the opportunity was not limited to any particular political group but was available to both businesspeople and politicians. He added that even companies linked to controversial businessmen such as S Alam or Salman F Rahman could have received the same facility if they had applied in accordance with the rules.

'Documented robbery' at Islami Bank between 2017 and 2024

Mansur alleged that between 2017 and 2024, Islami Bank Bangladesh PLC was turned into what he described as a "shell bank".

He claimed that approximately Tk90,000 crore was siphoned out of the bank during the Sheikh Hasina era.

According to Mansur, although the bank's external structure remained intact, its underlying assets and depositors' funds had been removed.

He said control of the bank's ownership structure was the primary mechanism behind the alleged asset stripping. According to him, 82% of the bank's shares were controlled by S Alam and related entities. Following 5 August, those shares were seized by Bangladesh Bank.

Mansur said this shareholding concentration allowed the group to dominate the bank's board and decision-making processes.

He added that during his tenure as governor, efforts were made to revive weak banks such as Islami Bank and United Commercial Bank PLC.

He claimed that Islami Bank's liquidity crisis had eased during his tenure and that the bank collected Tk26,000 crore in net deposits within a year.

"The liquidity support Islami Bank received from us was repaid within the first year. Its liquidity increased by around Tk20,000 crore during that period. We said the bank should receive additional liquidity support, provided good governance was ensured. We appointed highly qualified individuals to the board," he said.

Commenting on the bank's recent difficulties, Mansur said, "What has happened to Islami Bank should not have happened. If Islami Bank is pushed towards destruction, we will not be able to maintain exchange-rate stability."

Why he was removed as governor

Asked by Khaled Muhiuddin why he had been removed from the governorship, Mansur suggested that he may have stood in the way of certain policy decisions.

"I may have done things that did not align with their plans. For example, if I had remained governor, the changes made to the Bank Resolution Act might not have happened. Had such changes been pursued, I might have resigned myself."

"It is possible they considered me an obstacle and decided to remove that obstacle. Personally, I think it has turned out well for me," he added.

Response to allegations over Islami Bank after 5 August

Referring to questions raised in parliament by the home minister regarding alleged loan irregularities and dismissals at Islami Bank after 5 August, Mansur said he was not aware of any irregularities.

"To the best of my knowledge, no irregularities occurred. However, if allegations exist, an independent investigation can certainly be conducted," he said.

On the issue of staff dismissals, Mansur said around 5,000 employees had been removed because they had been recruited through irregular processes.

According to him, many had been hired solely on the basis of CVs, without examinations, and largely from a specific region.

He said a neutral recruitment examination was later organised for these employees. Of the 5,000 workers, only 500 to 600 reportedly participated, and around 450 passed. Those who passed were reinstated directly, while additional examinations were arranged for those who did not qualify initially, allowing them to remain within the banking system.

Disorder and challenges in the financial sector

Discussing the broader banking sector, Mansur said that 97% to 98% of the assets of some banks had effectively been looted.

To prevent systemic risks, he said, liquidity support amounting to Tk27,000 crore had been provided to five weak banks.

He argued that disclosing the true condition of banks to the public was not a crime, as depositors were already aware that they were struggling to recover their money.

Budget and revenue concerns

On fiscal policy, Mansur said Bangladesh's principal challenge remains weak revenue collection.

He described a revenue target of Tk4,00,000 crore against a Tk9,00,000 crore budget as unrealistic.

"An overly ambitious budget forces the government to borrow from banks, leaving the private sector short of credit," he said.

He stressed the need for expenditure restraint and stronger revenue mobilisation.

Exchange-rate policy

Mansur said the International Monetary Fund had been pressuring Bangladesh since October 2024 to adopt a market-based exchange-rate regime.

However, he said he initially resisted the move because he feared the exchange rate could spiral in a manner similar to experiences in Pakistan or Sri Lanka, potentially pushing the dollar to Tk200.

Instead, he said he spent six months stabilising the market through tighter monetary and fiscal policies before moving towards a market-based exchange-rate system.

According to Mansur, the dollar exchange rate stood at Tk118 when he assumed office and later stabilised between Tk120 and Tk122.

"Even after moving to a market-based exchange-rate system, the value of the dollar did not increase by a single taka," he said.