Bangladesh Bank governor to hold ministerial status

The governor of Bangladesh Bank is set to enjoy the same rank and status as a full minister under a draft ordinance amending the Bangladesh Bank Order. The draft also proposes reducing the number of government representatives on the central bank’s board and introducing a search committee-based appointment system for the governor and deputy governors.

These provisions are outlined in the draft of the Bangladesh Bank (Amendment) Ordinance 2025, prepared by the central bank. Governor Ahsan H Mansur recently sent a letter to the Ministry of Finance stating that the draft was formulated based on consultations with both domestic and international experts.

Separate letters were also sent to finance adviser Salehuddin Ahmed, finance secretary Md Khairuzzaman Mozumder, and financial institutions division secretary Nazma Mobarek, explaining that the ordinance is being prepared by amending the Bangladesh Bank Order, 1972. He also requested their cooperation in facilitating its promulgation.

In his letter, the governor noted that Bangladesh Bank had made several attempts in the past to bring about similar reforms, but those efforts had failed due to political constraints and lack of administrative will.

He wrote that the present moment is the most opportune time for such an amendment, which, if enacted, would stand as a significant achievement of the interim government.

The governor also said the amendment would provide a strong legal foundation to prevent the recurrence of past irregularities and mismanagement in the financial sector.

Bangladesh Bank is an autonomous institution overseeing the country’s banks and financial institutions. At present, the governor is appointed by the government. In the Warrant of Precedence, the governor’s rank is above that of secretaries but below the cabinet secretary, and equivalent to that of the attorney general and the comptroller and auditor general.

A central bank’s primary functions are to formulate monetary policy and control inflation. In most countries, central banks are kept beyond direct government control to preserve policy independence. In some authoritarian regimes, however, tensions have arisen between the head of state and the central bank governor. In Bangladesh, recent governors have been seen as largely compliant with government directives.

Against this backdrop, the draft amendment proposing to elevate the governor’s rank and reform the appointment process was placed before the Bangladesh Bank Board on 16 September and subsequently forwarded to the finance ministry.

However, insiders at the central bank say bureaucratic resistance could impede the proposal to grant the governor ministerial status.

Speaking to Prothom Alo on Monday, finance adviser Salehuddin Ahmed described the matter as “highly sensitive.”

“It is not an easy task,” he remarked. “We are reviewing it internally and will also discuss it with chief adviser professor Muhammad Yunus. Before that, it would be premature to comment on any specific aspect.”

In his letters to the advisers and secretaries, governor Ahsan H. Mansur argued that elevating the governor’s rank to that of a full minister would enhance the institutional standing of Bangladesh Bank.

According to him, such a change would serve as a structural measure to strengthen the central bank’s policy independence, international representation, and role in maintaining financial stability.

Citing examples from the United Kingdom, Singapore, India, Sri Lanka, Malaysia, and Thailand, the governor wrote that central bank governors in those countries hold ministerial rank, which helps them retain policy independence and decision-making authority.

He added that such a status would enable the Bangladesh Bank governor to play a more effective role in coordinating with other economic policymaking bodies of the government.

Mansur also pointed out that this proposal aligns with the International Monetary Fund’s 2021 Central Bank Independence Framework, which recommends comparable standing for central bank heads.

Speaking to Prothom Alo over the phone on Monday, he said, “The philosophy is central bank autonomy. If the governor’s position is elevated to ministerial rank, that autonomy will be strengthened.”

The Bangladesh Bank board currently consists of nine members, including the governor as chair, the finance secretary, the chairman of the National Board of Revenue, the secretary of the financial institutions division, one deputy governor, and four members from the private sector.

The draft ordinance proposes reducing government representatives from three to one, while increasing independent expert members from four to six.

According to the governor’s letter, this proposal follows internationally recognised models of central bank governance to ensure professionalism, diversity, and neutrality in policymaking.

He cited that countries such as the UK, Japan, South Africa, Singapore, New Zealand, Canada, and Ireland have limited or no government representation on their central bank boards.

He gave concrete examples: the UK’s central bank board has 12 members—apart from the governor and two deputy governors, the other nine are appointed from the private sector. In Canada, none of the 15 board members are government representatives; Japan’s nine-member board also has no government official.

Speaking to Prothom Alo, the governor said, “In many countries, there are no government representatives on the central bank board at all. Even the IMF has expressed reservations about having three such members in our case.”

Bangladesh Bank wants to make the appointment process for its top positions more transparent, impartial, and professional. Under the draft ordinance, when vacancies arise for governor or deputy governor, a three-member search committee will recommend qualified candidates to the President and government.

The committee will be chaired by a former finance minister or adviser, planning minister or adviser, or a former or outgoing governor. The composition, mandate, and procedures of the committee will be defined through separate rules.

The letter notes that this process aims to ensure politically neutral, merit-based appointments—an essential requirement for a modern, autonomous central bank.

If allegations arise against a governor or deputy governor, a three-member review committee, headed by a justice of the Appellate Division of the Supreme Court, will investigate the matter. Removal will be executed through legal and judicial processes, not by executive or administrative decision.

The draft also proposes that Bangladesh Bank determine its own salary structure and make senior appointments, including post creation, independently.

To improve discipline, transparency, and accountability in the banking sector and prevent irregularities, mismanagement, and conflicts of interest, the draft ordinance introduces a new provision empowering the central bank to establish a modern, integrated supervisory framework.

According to the governor, this framework would help curb unethical practices, information concealment, nepotism, and monopolistic behaviour in the financial sector.

To reduce dependence on the executive branch for regulatory implementation, the draft proposes empowering Bangladesh Bank to formulate its own rules, subject to presidential approval.

The bank’s paid-up capital is currently Tk 3 crore (30 million); the draft ordinance proposes increasing it more than 33 times—to Tk 100 crore (1 billion).

Senior bankers interviewed by Prothom Alo questioned how accountability would be ensured if Bangladesh Bank were granted greater powers.

When asked to whom the central bank would be accountable, governor Ahsan H. Mansur said it would remain answerable to the Jatiya Sangsad (National Parliament), with a parliamentary committee reviewing its activities and holding hearings.

He acknowledged, however, that past parliamentary committees had not functioned effectively, suggesting that “if such committees included 50 per cent members from the ruling party and 50 per cent from the opposition, they could become more effective.”

Former bankers also warned that if the governor holds ministerial rank, it could lead to a power struggle rather than policy coordination between the Ministry of Finance and the central bank.

Speaking about reducing government representation on the board, they said, it might weaken accountability mechanisms and cause public and fiscal policy priorities to be overlooked.

Former chief economist and ex-board member of Bangladesh Bank, Mustafa K. Mujeri, told Prothom Alo, “What matters is not whether the governor has ministerial rank but whether he performs his duties properly. Increasing pay or power does not automatically ensure better outcomes; it depends on the individual.”

“The governor should be empowered, but the accountability of both the office and its holder must be clearly defined. We must also remember that excessive freedom can pave the way for authoritarianism and abuse of power,” he added.