Staff Correspondent:

Bangladesh Bank is moving ahead with major reforms to the country’s banking and financial sector, bypassing the idea of forming a bank commission to take immediate action, the central bank governor, Ahsan H Mansur, said on Sunday.

“I was often asked why we didn’t set up a bank commission. Initially, I said we would, but later I decided to go straight into action instead of losing six to nine months to studies. We know our weaknesses,” he said at a dialogue on “365 Days of the Interim Government” at the Lakeshore Hotel in Dhaka, organised by the Centre for Policy Dialogue.

The banking regulator is extensively amending the Bank Companies Act 1991, including reducing the maximum tenure for directors from 24 years to six years, cutting sponsor directors to at least 50 percent, and requiring directors to be appointed from a qualified panel.

The Money Laundering Act is also being fundamentally revised to incorporate asset recovery measures, he said.

Three task forces have been formed: one to strengthen the banking sector, another to bolster Bangladesh Bank operations, and a third to recover assets from abroad.

The first two are under the jurisdiction of the central bank and the finance ministry, while the third involves the law ministry, the attorney general’s office, the Anti-Corruption Commission, the Criminal Investigation Department, and the foreign ministry, the central bank governor added.

Mansur said amendments are also being made to the Bangladesh Bank Order 1972 to enhance the central bank’s autonomy and accountability.

“Government and bureaucracy may resist, but financial sector governance must remain above politics,” he noted.

The Deposit Insurance Act is being overhauled to raise coverage from Tk 1 lakh to Tk 2 lakh, with separate funds for banks and non-bank financial institutions,” Mansur said.

“The recently enacted Bank Resolution Ordinance will enable continuous resolution processes for any troubled bank, regardless of ownership, ensuring “one regulator, one steering wheel.”