Bangladesh Bank governor’s unfiltered remarks: A cause for concern?
Public confidence is the foundation of any banking system. In Bangladesh, that confidence has been steadily eroded over the past 16 years under the Awami League-led government, with the sector plagued by financial scandals, irregularities, and unchecked mismanagement. Against this backdrop, the interim government appointed economist Ahsan H Mansur as governor of Bangladesh Bank last year, replacing former bureaucrat Abdur Rouf Talukder.
Mansur's appointment was widely seen as a much-needed corrective measure for a sector struggling with structural weaknesses. His tenure has been marked by bold reforms, including the restructuring of 11 banks, many linked to the controversial S Alam Group. However, his direct and unfiltered public statements about the fragile state of the banking industry have sparked intense debate -- raising a critical question: Is the governor inadvertently fuelling panic among depositors?
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The controversy began last September when Mansur declared in a press conference that at least 10 commercial banks were on the verge of bankruptcy. This blunt assessment sent shockwaves through the financial sector, triggering widespread speculation and fear. Reports soon surfaced of anxious depositors rushing to banks to withdraw their savings, while many demanded the names of the supposedly failing institutions.
Several high-ranking bank executives, speaking anonymously, warned that such public statements -- however well-intentioned -- could have disastrous consequences. In a sector already reeling from a crisis of confidence, even a hint of instability can worsen the very problem regulators are trying to fix.
"Mansur is a knowledgeable and well-intentioned governor, but given the sector's sensitivity, he should exercise extreme caution in his public remarks," one banking executive cautioned.
The debate over Mansur's communication style escalated further yesterday during a virtual session on "Macroeconomic Policy and Governance in the Banking Sector", held on the final day of the "Recommendations by the Task Force on Re-strategising the Economy" conference.
During the session, Mansur reiterated his concerns about struggling banks bluntly: "We are working to support struggling banks, but not all will survive." While he did highlight some progress -- mentioning that Islami Bank Bangladesh and United Commercial Bank had recovered -- his words once again cast doubt over the fate of the rest.
His remarks drew swift and sharp criticism. National Bank Chairman Abdul Awal Mintoo did not hold back, calling on Mansur to curb his rhetoric.
"Constantly discussing the closure of banks is counterproductive. If shutting down banks was the solution, what about the larger economic fallout?" Mintoo said.
He also took issue with Mansur's rigid stance on monetary policy, particularly his opposition to money printing: "He keeps saying he won't print money. But is that an absolute position? Is that always a viable solution?"
Task Force member Monzur Hossain echoed these concerns, calling for greater discretion in the central bank's public messaging. Regulatory bodies must carefully evaluate what information should be disclosed publicly and what should remain internal, he argued.
Mansur's commitment to reform is undeniable, but his approach to public communication is proving increasingly risky. Banking systems are inherently fragile. When the central bank governor himself repeatedly casts doubt on the survival of financial institutions, it risks adding to the crisis, where fear alone can push banks into deeper distress.
Reforms are necessary. Transparency is vital. But in a sector as sensitive as banking, words carry weight. Bangladesh Bank's leadership must refine its communication strategy to prevent unnecessary panic.
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