Central Bank Governor cites reason for 3 lakh crore taka bank embezzlement

Dhaka, 21 January – Bangladesh Bank Governor Dr Ahsan H. Mansur has sounded a stark warning about the state of the country’s banking sector, attributing a loss of approximately 300,000 crore Taka to governance failures and the absence of effective checks and balances. Speaking at a public lecture titled “Banking Sector: Current Status and Future Challenges” at Jagannath University on Wednesday morning, Dr Mansur underscored the critical role of governance in maintaining financial stability.

The event was jointly organised by the Bangladesh Economic Association and the university’s Department of Economics, with Dr Mansur serving as the chief guest.

According to the Governor, one of the gravest problems afflicting the banking sector is governance failure, largely driven by the issuance of loans under governmental or influential private directives. “The governance systems of banks have been compromised due to unauthorised lending, both on an individual and governmental level. Negligence across multiple institutions, including Bangladesh Bank, contributed to this situation—this cannot be denied,” he remarked.

Dr Mansur highlighted that private control over bank ownership had exacerbated the crisis. He cited the merger of five Islamic banks as an example, all previously under individual ownership. “The absence of proper checks and balances has resulted in capital worth around 300,000 crore Taka leaving the country,” he said.

He further noted that while banking ranks third globally among four major financial sectors, in Bangladesh it dominates to the detriment of other sectors. “We must restore the sector to a healthy state, which will require sustained and coordinated efforts, prioritising its integration with other economic sectors,” he added.

On the issue of bank proliferation, Dr Mansur argued that 10–15 banks would suffice for Bangladesh’s needs. Currently, the country has 64 banks, leading to administrative complexity and higher operating costs. “Reducing the number of banks would lower expenses and improve profitability. For comparison, a single bank in Singapore earns as much as all Bangladeshi banks combined,” he said.

Jagannath University Vice-Chancellor, Professor Dr Rezaul Karim, praised Dr Mansur’s efforts in reviving a severely weakened sector. “Our students have witnessed how mismanagement can destabilise an entire industry. The positive trajectory of recent reforms gives us hope for sustained progress,” he said.

The lecture also featured prominent economists including Professor Dr Mahbub Ullah, Convenor of the Bangladesh Economic Association, and Dr Mohammad Helal Uddin, Member Secretary.

Key Statistics and Observations by Dr Ahsan H. Mansur

Dr Mansur concluded by urging long-term, systematic reforms to stabilise the sector and ensure sustainable economic growth.