Head of the central bank Governor of Bangladesh Bank Ahsan H. Mansur announced that procedures are underway in coordination with international bodies for the repatriation of the laundered funds. He again emphasized that moral action and action as per the law are required in this scenario. He threatened that the lives of money launderers would be made miserable in order to dissuade other people in the future from doing such an act. He once again asked for the assistance of all the concerned people.
Chairing the opening session of the annual banking conference of the Bangladesh Institute of Bank Management on Wednesday (9th April), Governor Mansur addressed the meeting as the chief guest. Director General of the BIBM Md. Akhtaruzzaman presided at the meeting, while the keynote address was delivered by Abdul Hannan Chowdhury, the Vice Chancellor of the North South University and the Chairman of Grameen Bank as well.
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The Governor noted that the Islamic banks would be absorbed into two giant Islamic banks. He stressed that political will is required so that reforms in the banking system are carried forward. Regardless of political transitions in the government, those reforms need to be carried on, and the independence of the central bank should be preserved.
He also mentioned that in the banks where malpractices were detected, their boards were replaced in the interests of the depositors. In 11 such banks, their boards were replaced initially, two more, and one reconstituted its board voluntarily. The Bank Company Act is being modified to include in it who can serve on the boards of banks and as independent directors.
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Mansur admitted that the banking sector’s ailments are partly due to the fault of Bangladesh Bank as well. The central bank is being made strong enough to resist external pressures and the issue of dual control in the banking sector. It is being made independent in an effort to make it more effective in supervision so that it can work smoothly. Efforts are being made so that issues are detected at an initial stage, and as yet, the central bank is not interfering in the day-to-day activities of the banks but will keep monitoring whether the boards and management are performing their task or not. The central bank’s report system will be made fully automated, as everything will be submitted online.
Regarding the Islamic banks, the Governor reported that certain of them are plagued by serious issues. There are numerous small Islamic banks currently, some in poor condition. These would be concentrated in two giant Islamic banks, with new supervisory and legal framework tailored specifically for Islamic banking. This effort would be carried out on the principles of international best practices.
He also recommended that most problem banks are under-capitalized and in poor overall condition as well. It would take several years to restore these banks and political support on a continuing basis will be necessary. Finally, he stressed that no loss of central bank independence is allowed in such reform.
