Restoring order in financial sector, Cenbank main responsibility: Salehuddin

Finance Adviser Salehuddin Ahmed has instructed officials to work with honesty and efficiency to restore order in the financial sector, including the Bangladesh Bank, and to control inflation while creating employment by revitalising the economy.

"Our main responsibility is to restore order in the financial sector, including the central bank," he said during his first views-exchange meeting with officials organised by the Finance Division at the Secretariat on Sunday (11 August).

"Do not carry out any task blindly under someone else's orders. While it's good to follow directives, take the initiative to do some groundwork before proceeding," he was quoted by an official as saying.

Emphasising the importance of proactivity, Salehuddin also urged officials to cease exercising "special powers" without accountability, so that any decision made can be justified.

On the first working day of the interim government, which took charge on Thursday night, Salehuddin said, "We have not come up with a permanent solution. We are here for a short time. I may initiate reforms, but they will need to be implemented over the long term. Our tenure has not been decided yet. It will be determined through discussions after we begin the reforms."

He emphasised the need to strengthen the financial sector, including the Bangladesh Bank, immediately. "We have no other agenda. Our focus is on state repair and reform," he added.

Seeking cooperation from officials, he said, "We have taken on this responsibility at a time when there are many crises. We need everyone's help to address these problems. We can't work alone; we must work as a team."

Salehuddin, who once headed the Bangladesh Bank, said, "We need to restore momentum to the economy immediately through efficiency and integrity. We have potential, and it should be utilised."

He said the Bangladesh Bank currently has no governor or deputy governor, but this does not impede the operation of the payment system. Officials are functioning in accordance with the law.

He added, "Special powers cannot be used indiscriminately. When I was governor, I never used special powers. There is a significant lack of transparency in the financial sector and government spending, including the banking sector. From now on, transparency must be ensured."

Speaking about former governor Abdur Rouf Talukder, who resigned on Saturday amid pressure from central bank officials, Salehuddin said, "The problem in Bangladesh is that we react too easily. I have often discussed issues with the Bangladesh Bank. The governor would always claim that he had addressed them all. If you say 10 things, at least two should be done. I discussed something a few days ago, and the governor said he had already done it."

The 79-year-old economist, who has taken on the herculean task of streamlining the fragmented financial sector, told officials, "You have to be a little tactful. Work for the people. The main challenges are controlling inflation and generating employment."

"Common people are in a lot of trouble. Many may not even be able to eat meat once a month," he added.

The adviser said, "Our policies and strategies are very good, but they are not implemented. However, now they must be implemented with skill, honesty, and sincerity."

He also emphasised that unaccounted expenses cannot be justified in the name of megaprojects. "You know how to construct big buildings. Care must be taken to ensure that money is not wasted. Resources should be used wisely. I need your help in this regard."

Speaking about the restriction on withdrawing more than Tk2 lakh by cheque in banks, he said it's not because there is no money in the banks, but due to the situation, smaller amounts are being paid by cheque to prevent anyone from walking away with large sums of money.

Regarding the shortage of cash in ATM booths, he explained that it is currently difficult to transport cash due to the absence of police, but this issue will be resolved soon.

He also said the central bank governor and the chairman of the Bangladesh Securities and Exchange Commission will be appointed soon.

However, he clarified that the chairman of the National Board of Revenue is not being removed, even though he has submitted his resignation letter.

Finance Secretary Md Khairuzzaman Mozumder said there are many challenges in the economy, especially controlling inflation and tackling budget deficits. "But right now, we mainly want to listen to the adviser," he added.

NBR Chairman Abu Hena Md Rahmatul Muneem said, "Of internal resources, 86% are earned through the NBR, and officials are working sincerely to collect revenue. However, there has been some negative impact due to Covid-19 and the Ukraine-Russia war."

"We are employees of the republic. No matter which government comes to power, we will work sincerely for them," he added.

An official of the Finance Division said in the meeting that Bangladesh is still primarily using concessional loans for debt management. The debt repayment situation is also manageable. According to the debt sustainability and risk assessment by the IMF, Bangladesh will be in a favourable position in debt management until 2031.

He also said 373 development projects are currently under implementation with foreign funding. There is regular communication with development partners to ensure that the funds for these projects are released on time.