TIB Raises Concerns Over Bangladesh Bank Governor Appointment

Transparency International Bangladesh (TIB) has expressed deep concern regarding the appointment of the new Governor of Bangladesh Bank, highlighting serious questions about the central banker’s ability to act independently amid potential conflicts of interest and corporate influence.

In a statement released on Thursday, 26 February, TIB cautioned that the newly appointed Governor’s background may compromise the institution’s autonomy.

Dr. Iftekharuzzaman, Executive Director of TIB, noted: “The new Governor’s experience in the banking sector is largely tied to managing indebted institutions, handling non-performing loans, and overseeing special loan rescheduling processes. Additionally, he has been associated with influential business lobbies, including the ready-made garment industry, the housing sector, the Association of Travel Agents of Bangladesh (ATAB), and the Dhaka Chamber of Commerce and Industry.”

He added, “In the context of a banking sector still recovering from the authoritarian mismanagement era, it remains uncertain how the newly appointed Governor can perform independently, free from the influence of business lobbies or indebted loan defaulters.”

Dr. Iftekharuzzaman further highlighted worrying statistics regarding policymaking influence:

“Appointing a businessman with prior experience in loan rescheduling, who has benefitted from policy influence in both the ready-made garment and housing sectors, to the country’s top banking position carries potential risks for financial stability,” he said.

TIB stressed that this marks the first time in Bangladesh’s history that a businessperson has been appointed as Governor of the central bank, raising questions about the message this sends to both national and international observers.

Dr. Iftekharuzzaman also questioned the propriety of appointing a member of the ruling party’s election management committee to such a critical role, noting potential conflicts with commitments to good governance, transparency, and discipline in the banking sector.

According to TIB, the banking sector has previously suffered from politicisation and self-interest, contributing to rising non-performing loans and money laundering. Amid a pressing need to attract foreign investment and ensure financial governance, doubts persist over whether the new Governor can act impartially, control inflation, stabilise the financial system, and enforce corrective measures against weak banks.

Following the widespread demands for reform after the 24 February mass movement, TIB emphasised the public expectation for an independent central bank. Ultimately, the organisation concluded, “It now remains to be seen whether the newly appointed Governor can lead Bangladesh Bank free from governmental and corporate pressures, upholding the institution’s independence.”