Transparency International Bangladesh (TIB) on Thursday expressed concern over whether the newly appointed governor of Bangladesh Bank (BB) would be able to discharge his responsibilities independently and rise above potential conflicts of interest.
In a statement, the anti-corruption watchdog raised doubts about how a readymade garment and real estate entrepreneur, who had rescheduled loans for his own company under special consideration, could impartially perform the duties of central bank governor, including controlling inflation, ensuring financial stability and promoting good governance in the banking sector.
"The newly appointed governor's experience in the banking sector is primarily related to being a borrower, later a loan defaulter, and subsequently benefiting from loan rescheduling under special consideration. In addition, he has played significant roles as part of influential business lobbies, including the readymade garment sector, the real estate sector, ATAB, and the Dhaka Chamber," TIB Executive Director Iftekharuzzaman said in the statement.
"The question is whether the governor, appointed in haste, will be able to meet public expectations of restoring order in a banking sector that fell into disarray during the authoritarian kleptocratic regime, remaining free from the influence of business lobbies, borrowers and loan defaulters," he said.
Iftekharuzzaman added that the concern was particularly significant in a context where nearly 60 per cent of members of parliament and 62 per cent of cabinet members are primarily businesspersons, and around 50 per cent of MPs are loan defaulters with outstanding recoverable loans surpassing all previous records.
"How risky could the appointment of a loan-defaulting businessperson, with experience of obtaining loan rescheduling under special consideration and benefiting from policy capture in sectors such as the readymade garment industry and REHAB, be for the banking sector?" Iftekharuzzaman asked.
"Through this appointment, what message is being conveyed nationally and internationally? We urge the government to reflect on these questions," he added.
Describing it as the first time in the country's history that a businessperson has been appointed Governor of Bangladesh Bank, he noted, "The government must also consider how prudent it was to entrust the central bank's leadership to a member of the election management committee of the ruling party."
Appointing an individual burdened with conflict of interest as Governor of Bangladesh Bank constitutes a clear breach of the electoral commitment, he said.
At a time when ensuring good governance in the financial sector and attracting foreign investment are critical amid ongoing economic challenges, the effectiveness of this appointment remains questionable, he added.
Iftekharuzzaman further questioned to what extent the central bank, under the new leadership, would be able to function independently beyond partisan and business interests while regulating and supporting the overall banking sector.
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