United News of Bangladesh

The country’s banking sector remains under severe structural stress and meaningful reform cannot be achieved within a short time frame, said Finance Adviser Dr Salehuddin Ahmed said on Thursday. “The banking sector is definitely challenging. Institutions have been weakened, laws are often ignored and in many cases owners themselves control management, bypassing prudential norms,” he said while speaking at MTB-FE Roundtable on ‘Banking sector reforms’ at a city hotel. The adviser said the challenges facing the sector are deep, complex and institutionalized and the problems accumulated over the past 15 years cannot be fixed in 14 to 16 months. He said Bangladesh Bank has operational autonomy but full independence is neither realistic nor desirable without accountability. “No central bank can operate beyond the sovereignty of the state. Autonomy must go hand in hand with accountability,” he added. Referring to international assessments, the adviser cited recent global reports highlighting illicit financial flows, crime-related trade and inflation as key vulnerabilities for countries like Bangladesh. He said these issues directly affect the stability of the banking system and must be addressed primarily by the central bank with support from the finance ministry. The adviser also criticised the role of auditors, alleging that some chartered accounting firms had signed audit reports without proper verification. “This is an absurd reality. Auditors signing backdated or questionable reports severely undermine financial discipline,” he said adding that some firms have already been blacklisted. Irregularities are not limited to banks alone, mentioning that large financial activities in some sectors, including higher education often escape proper auditing, he added. The adviser said the government has recently passed amendments to the Negotiable Instruments Act and the House Building Finance Corporation Act, while work on amendments to money laundering laws and economic courts is ongoing. However, time constraints remain a major challenge, he said. “We have very limited time left but we are trying to complete as much as possible,” he said. The adviser acknowledged concerns over excessive numbers of senior officials at Bangladesh Bank and said steps have  already been taken to rationalise the structure. Despite the challenges, he said Bangladesh’s international image remains relatively positive. “Externally, the perception is not that Bangladesh is collapsing. But partners do say the situation is difficult,” he noted. The adviser said banking sector reform is unavoidable and critical for the economy. “This opportunity should not be wasted. If we cannot complete all reforms now, the next government must carry them forward. The banking sector is too important to delay,” he said. Bangladesh Bank Governor Dr. Ahsan H Mansur was present as the special guest while Professor of the Bangladesh Institute of Bank Management Dr. Shah Md. Ahsan Habib delivered the keynote speech.

Some banks are recovering well, while others may continue to struggle, but no banks will be shut down, said Finance Adviser Salehuddin Ahmed on Tuesday. “Some banks are recovering. Islami Bank, the largest bank, is improving. However, some banks will continue to struggle. But we will not shut down any bank,” he said while speaking at a press conference at the Secretariat, organised by the Ministry of Finance. Finance Adviser prioritises short-term reforms over long-term ones The Finance Adviser mentioned that the government’s commitment to stabilising the banking sector despite challenges. He also focused on fiscal management, mentioning that measures are being taken to reduce government expenditure. “Salaries and allowances for government officials will not be impacted,” he assured. Referring to the Annual Development Programme (ADP), Dr Salehuddin Ahmed mentioned that projects deemed unnecessary or influenced by political considerations are being reviewed for possible adjustments. Finance Secretary Dr Md Khairuzzaman Majumdar, Secretary of the Financial Institutions Division Nazma Mobarak, Secretary of the Economic Relations Division (ERD) Md Shahriar Kader Siddiqui, and National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan were also present at the press conference.