TIB flags conflict of interest in new BB governor
Staff Reporter :
Transparency International Bangladesh (TIB) has raised concerns over the independence and impartiality of the newly appointed Governor of Bangladesh Bank, questioning what message the government intends to convey through the “unprecedented appointment”.
In a statement on 26 February, TIB’s Executive Director Iftekharuzzaman questioned whether the new governor will be able to perform his duties without being influenced by business groups or political interests.
He said, “The newly appointed governor’s experience in the banking sector primarily involved being a borrower, later a loan defaulter, and subsequently benefiting from loan rescheduling under special consideration.”
He further observed that the governor had played “significant roles as part of influential business lobbies, including the readymade garment sector, the real estate sector, ATAB, and the Dhaka Chamber.”
Against this backdrop, TIB questioned whether the appointment was made in haste and whether the new central bank chief would be able to meet public expectations of restoring discipline in a banking sector that, according to the organisation, “fell into disarray during the authoritarian regime.”
“Particularly in a context where nearly 60 percent of Members of Parliament and 62 percent of the Cabinet members are primarily businesspersons, and around 50 percent of MPs are loan defaulters with outstanding recoverable loans surpassing all previous records, how risky could the appointment of a loan-defaulting businessperson be for the banking sector?” he asked.
TIB also questioned the broader implications of the decision. “Through this appointment, what message is being conveyed nationally and internationally? We urge the government to reflect on these questions,” Dr. Iftekharuzzaman added.
Describing the decision as “unprecedented” – the first time in the country’s history that a businessperson has been appointed Governor of Bangladesh Bank – TIB warned that it could risk turning the central bank into “an instrument of business lobbies dependent on defaulted loans and political connections,” rather than a guardian of national interest.
The organisation further noted that the new Governor had been a member of the ruling party’s election management committee, raising additional concerns over potential partisan influence.
Referring to the BNP’s election manifesto pledge to ensure good governance and discipline in the financial sector, TIB Chief said appointing an individual “burdened with conflict of interest” constituted “a clear breach of that electoral commitment.”
He also recalled what he described as the fragile state of the banking sector under the previous regime, when “partisan considerations and facilitation of vested interest groups by Bangladesh Bank contributed to large-scale money laundering, soaring defaulted loans, and overall economic vulnerability.”
At a time when attracting foreign investment and ensuring financial sector stability are critical amid ongoing economic challenges, TIB said doubts have arisen about the effectiveness of the new appointment.
The organisation questioned whether the Governor would be able to act independently in controlling inflation, maintaining financial stability, and taking punitive action against weak banks.
“The mass uprising of 2024 generated public expectations for positive change across sectors, including the establishment of an independent central bank,” Dr. Iftekharuzzaman said, adding that it remains to be seen “to what extent the central bank, under the leadership of the newly appointed Governor, will be able to function independently, beyond partisan and influential business interests.”
TIB urged the government to reconsider the broader implications of the appointment and ensure that the central bank operates free from conflicts of interest and undue influence.
