Finance Adviser Dr. Salehuddin Ahmed on Thursday warned that Bangladesh’s banking sector remains under severe structural stress and that meaningful reform cannot be achieved quickly, stressing the need for sustained efforts and accountability.
Speaking at MTB-FE Roundtable on “Banking Sector Reforms” at a Dhaka hotel, Salehuddin Ahmed highlighted the deep-rooted challenges facing the country’s banking system.
“The banking sector is definitely challenging. Institutions have been weakened, laws are often ignored, and in many cases, owners themselves control management, bypassing prudential norms,” he said.
The adviser described the sector’s problems as complex, institutionalized and accumulated over the past 15 years, noting that they cannot be resolved in just 14 to 16 months.
While acknowledging Bangladesh Bank’s operational autonomy, he said full independence is neither realistic nor desirable without accountability.
“No central bank can operate beyond the sovereignty of the state. Autonomy must go hand in hand with accountability,” he added.
Salehuddin also cited international reports highlighting vulnerabilities such as illicit financial flows, crime-related trade and inflation, which directly affect banking stability.
He stressed that these issues must be addressed primarily by Bangladesh Bank, with support from the finance ministry.
The adviser criticized the role of auditors, claiming some chartered accounting firms had signed reports without proper verification.
“This is an absurd reality. Auditors signing backdated or questionable reports severely undermine financial discipline,” he said, noting that some firms have already been blacklisted.
He further noted that irregularities extend beyond banks, with large financial activities in sectors such as higher education often escaping proper audits.
Salehuddin mentioned recent government initiatives, including amendments to the Negotiable Instruments Act and the House Building Finance Corporation Act, as well as ongoing work on updating money laundering laws and economic courts.
“Time is limited, but we are trying to complete as much as possible,” he said, acknowledging concerns over excessive senior officials at Bangladesh Bank and stating that steps have been taken to rationalize the structure.
Despite these challenges, he said Bangladesh’s international image remains relatively positive.
“Externally, the perception is not that Bangladesh is collapsing. But partners do say the situation is difficult,” he noted.
Stressing the critical importance of banking sector reform for the economy, Salehuddin said, “This opportunity should not be wasted. If we cannot complete all reforms now, the next government must carry them forward. The banking sector is too important to delay.”
Bangladesh Bank Governor Dr. Ahsan H. Mansur attended the roundtable as the special guest, while Dr. Shah Md. Ahsan Habib, Professor at Bangladesh Institute of Bank Management, delivered the keynote speech.
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