Bangladesh Bank governor and an unprecedented incident
An unprecedented incident centering the Bangladesh Bank governor Abdur Rauf Talukdar took place the day after the budget was announced. The day after the budget was placed in the Jatiya Sangsad, the finance minister called for a press briefing, as is the norm, to answer questions of the media. Previously the finance ministers would turn up at this annual post-budget event accompanied by senior officials of his ministry. However, the now deceased finance minister Shah AMS Kibria set a new norm by bringing along quite a few bureaucrats along with his colleagues in the cabinet, to support his budget proposal and offer explanations. Also among those who attended the press briefing with the new finance minister Abul Hassan Mahmud Ali on the day after the budget, was the Bangladesh Bank governor.
The incident took place when the question and answer session started. On behalf of the journalists present there, it was said that if governor Abdur Rauf Chowdhury spoke, the journalists would stage a boycott. It was said that the governor has prohibited journalists from entering Bangladesh Bank and so it had been decided, accordingly, not to listen to him speak.
There were 10 ministers, state ministers and advisors present at the post-budget press briefing. Almost all the TV channels were airing the programme live. This was an unprecedented decision taken by the journalists at this live event. But the boycott of governor Abdur Rauf Talukdar started a few weeks back. On 8 May a press briefing had been summoned at Bangladesh Bank to announce the decision that was taken on the monetary policy at a meeting with the International Monetary Fund (IMF) delegation that had visited Dhaka. Journalists boycotted the meeting. The journalists reported on the three main decisions that had been taken, but they boycotted the press briefing as they were not being allowed to enter the central bank for over a month.
The ban on journalists entering the central bank is still in place. There is only permission to go to a specific official with a pass. Journalists go to Bangladesh Bank to carry out their professional duties. They seek information on various issues of public interest, other than that dished out by the authorities. The problem is, no official will give their own identity when disclosing anything to journalists in case they fall prey to the ire of the authorities. The journalists with a regular beat at the central bank complain that the governor Abdur Rauf Talukdar is the main person behind the ban on journalists entering the premises.
Abdur Rauf Talukdar got a 'D' in the New York-based Global Finance magazine's ranking. This is quite a poor mark. We surely can hope that he overlooks pressure from all quarters, even the government, and improve his own ranking as a governor by ensuing good governance in the financial sector.
The central bank of any country is a sensitive place. The control of a country's financial activities lies with the central bank. It is not that anyone at any time can freely enter the central bank. In Bangladesh too, as in the secretariat, journalists can enter and carry out their professional duties with a special pass. They can meet their 'sources' and get information that is of public importance. Such news helps the government to take correct decisions too.
The US Federal Reserve is the world's most important central bank. Those involved in formulating the Fed's monetary policy remain silent at the moment. They are in their 'blackout period'. On 11 and 12 June the Federal Open Market Committee will hold its meeting. The rule is that from the second Saturday before the first day of this meeting till midnight the day after the meeting, the officials will not speak about this. This is more or less a matter of 12 days. But in this time the staff can reveal various statistics of the Fed and can answer technical questions on these facts and figures. Several other central banks have this blackout period too. This is because if details of the monetary policy are leaked out in advance, this can create serious disruption.
In general, no one in Bangladesh's central bank, not even the senior officials, speak much. It is very rare that they open up about their thoughts on the country's financial sector, if there are any problems and so on. When the people are floundering under the pressure of inflation, why is there no move to increase the bank interest rates in an effort to control inflation as in other countries? No one in Bangladesh Bank has made any statement on this. They have no answer either as to why the 6 per cent-9 per cent interest rate has been followed for so long, exacerbating the sufferings of the people.
The situation in Bangladesh is different from that of other countries for many more reasons too. On the day that the budget was placed, it was learnt that non-performing loans in the banking sector had increased to over Tk 1820 billion (Tk 1 lakh 82 thousand crore). In a matter of just three months, default loans went up by Tk 365 billion (Tk 36,500 crore). And concealed default loans are even more.
When Awami League came to power in 2009, default loans stood at around Tk 220 billion (Tk 22,000 crore). Within just 15 years this amount expanded exponentially in leaps and bounds. And the central bank has a role in the non-performing loans reaching this height.
There are long standing allegations of strong bonds between senior authorities of the central bank and loan defaulters. It is alleged that defaulters and big businessmen enter the central bank as they please, fix the interest rates, place persons of their choice in various top posts of various banks -- the central bank gives its seal of approval.
There has never been any answer as to why when certain banks have no funds in their current account, the central bank simply prints more money and supplies it to those banks. The less written about these matters, the happier is the central bank, government and the beneficiaries of such actions.
It is essential to reveal these matters of public interest. On the excuse that these are sensitive matters, the cyber heist of the central bank's reserves was kept under covers for over a month. This was wrong. If only a certain group or quarter financially benefits from the publication of certain information, then this certainly must remain confidential. But when attempts are made to hide corruption, wrongdoings, irregularities and scams that take place, then the people get a different message about the central bank. It is the governor who must ensure this transparency.
Abdur Rauf Talukdar got a 'D' in the New York-based Global Finance magazine's ranking. This is quite a poor mark. We surely can hope that he overlooks pressure from all quarters, even the government, and improve his own ranking as a governor by ensuing good governance in the financial sector.
* Waliur Rahman is chief business editor, Prothom Alo
* This analysis appeared in the print and online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir