Ongoing reforms to continue

Newly appointed Bangladesh Bank (BB) Governor Md Mostaqur Rahman has assured bankers that the reform initiatives launched by his predecessor will continue and that political interference will not be tolerated.

The BB governor made the remark at a meeting between BB and the Association of Bankers, Bangladesh (ABB) at BB headquarters yesterday.

Officials who attended the meeting told The Daily Star that the governor made it clear he would not yield to political pressure. Bank CEOs have been encouraged to approach him directly if they face interference in lending or governance matters.

BB officials, speaking on condition of anonymity, said that Rahman said ongoing banking sector reforms, including the reconstitution of boards of stressed banks, would proceed without interruption.

Arief Hossain Khan, executive director and spokesperson of BB, told The Daily Star that the governor urged banks to support the government’s commitment to generating new employment opportunities.

He said service standards will be set and a rental fee structure for office space will be introduced to facilitate the opening of new bank branches, reducing the need for repeated central bank approval.

After the meeting, Mashrur Arefin, chairman of ABB and CEO of City Bank, described the session as productive.

“The governor was very cordial and chaired the meeting with humility, warmth and grace,” he said. “He listened patiently to the views of all 19 of us one by one and outlined several of his core priorities.”

According to the City Bank CEO, the governor emphasised the creation of a business and manufacturing-friendly environment to generate 1 crore new jobs.

He also stressed the productive use of distressed assets arising from bad loans, including reopening closed factories for new manufacturing or service ventures.

Arefin said the new governor spoke about the “One Village, One Product” initiative.

“This is about how banks can help, say, Ashtogram’s famous cheese reach global markets. This can be done district by district, village by village, for many other products,” the governor told them.

“As ABB chairman, this is when I highlighted the importance of SME financing and the need for continued central bank support to SMEs through refinance packages,” Arefin added.

Another managing director of a private commercial bank said the governor pledged that the central bank would respond more promptly to issues raised by ABB, aiming for faster decisions to reduce the cost of doing business -- a key priority of the new government.

He also mentioned that the BB plans to move towards selective deregulation, beginning with allowing banks to negotiate rental and lease agreements independently within defined regulatory guidelines.

Efforts will also be made to expedite the release of overdue funds related to exporters’ incentives, EDF reimbursements, and remittance incentives, he added.

Arefin said, “We are professionals, and we want the governor to succeed. He described bank CEOs as key stakeholders. We also appreciated his idea of the central bank and commercial banks jointly hosting a ‘Bangladesh Day’ this year for our foreign correspondents and lenders.”

BB officials, including deputy governors, were also present at the meeting.