Bangladesh Banks Must Remain Politically Neutral: Governor

Bangladesh Bank Governor Mostaqueur Rahman has issued a firm directive that no bank in the country should operate in allegiance to any political party or group. Speaking at a meeting with the Board of Directors and senior executives of Islami Bank Bangladesh Limited (IBBL) on Monday, the governor highlighted past lapses in governance and emphasised the need for professionalism, transparency, and political neutrality across the banking sector.

Historical Context and Governance Concerns

Governor Rahman criticised IBBL’s previous operations under the Awami League government, stating that the bank had acted in favour of a particular political faction, which had created opportunities for widespread mismanagement and financial irregularities. He stressed that such practices must end immediately, not only for Islami Bank but for all banks in Bangladesh.

“No bank will work for any party, group, or family. Every institution must operate free from political influence, with full professionalism,” the governor said.

This meeting marked Governor Rahman’s first formal engagement with IBBL since taking office. During discussions, bank officials outlined past instances of financial malpractice while also detailing measures taken to stabilise and revitalise the bank. They requested guidance and policy support from Bangladesh Bank to further strengthen operations.

Strengthening Remittance and Foreign Exchange Flows

Officials noted that IBBL has historically been a leading institution in remittance collection, particularly from expatriates in Middle Eastern countries, leveraging a robust international network. This position enabled the bank to maintain strong foreign currency reserves and expand its deposit base.

Governor Rahman emphasised the strategic importance of boosting remittance collection amid current regional instability. The ongoing conflict in the Middle East has increased domestic demand for US dollars, and he urged IBBL to enhance its efforts in mobilising foreign earnings.

Recovery of Non-Performing Loans

Governor Rahman also highlighted the need to revive investment projects that had become non-performing or defunct. He directed IBBL to engage with entrepreneurs and consider renewing defaulted loans under special policy measures to reopen factories and restore economic activity. This approach aims to protect both depositor interests and broader industrial output.

Commitment to Professionalism

The governor concluded by reiterating that Islami Bank, once a highly respected and strong financial institution, must continue its revival through disciplined management, robust oversight, and adherence to regulatory guidance. Bangladesh Bank will provide full support to ensure governance standards are met while facilitating the bank’s growth and stability.

“The central bank will continue to support Islami Bank in every possible way to maintain its strength, enhance foreign currency inflows, and safeguard depositor trust,” he stated.

This meeting underscores a broader effort by Bangladesh Bank to strengthen the country’s financial sector, eliminate political interference, and reinforce the role of banks as professional and accountable institutions.