Why did Ahsan H Mansur become the ‘enemy’ of bank customers?

The way Bangladesh Bank Governor Ahsan H Mansur was removed has drawn intense criticism. There is also debate, both for and against, about what he did or did not do to address the crisis and uncertainty in the economy and banking sector, that is, about his successes and failures.

While economists have largely praised him, many ordinary bank customers have criticised him. Their major complaint is that because of him they were unable to withdraw their deposits from banks. According to them, Ahsan H Mansur “blocked” their money. What is the reality? Let us take a look.

Under Bangladeshi law, conventional banks must deposit 17 per cent of their total deposits with Bangladesh Bank (13 per cent in securities and 4 per cent in cash). Islamic banks must maintain 9.5 per cent (5.5 per cent in securities and 4 per cent in cash). Excluding the security portion, each bank must keep 4 per cent of its total deposits in its principal account with Bangladesh Bank. This is formally known as the CRR (Cash Reserve Ratio).

After the mass uprising of 2024, Ahsan H Mansur took charge as governor. He found that many banks in Bangladesh were effectively insolvent and lacked the capacity to repay deposit liabilities. In several cases, the required CRR funds were not maintained in their principal accounts; instead, those accounts showed negative balances.

Consider the situation in a few banks: First Security Islami Bank Plc had a shortfall of Tk 106.11 billion (10,611 crore), Islami Bank Bangladesh Plc had a shortfall of Tk 71.28 billion (7,128 crore), Social Islami Bank Plc had Tk 44.81 billion (4,481 crore), National Bank Plc had Tk 34.79 billion (3,479 crore), union Bank Plc had Tk 27.94 billion (2,794 crore), Global Islami Bank Plc had Tk 7.12 billion (712 crore), and Bangladesh Commerce Bank Plc had Tk 3.92 billion (392 crore) in deficit.

In total, these seven banks had withdrawn nearly Tk 296 billion (29,597 crore) from Bangladesh Bank in violation of regulations. Two additional banks also lacked sufficient CRR. Yet each of these banks was supposed to maintain at least 4 per cent of total deposits in its account. In effect, after looting their own banks, the insiders began draining Bangladesh Bank as well.

The governor of Bangladesh Bank is the custodian of the country’s economy. If you had taken charge and seen such a situation, what would you have done? Would you have allowed these banks to withdraw even more money the next morning?

If the banks failed to get more funds, they would be unable to repay depositors, leading to panic and a nationwide loss of confidence in the banking system. But giving them more money could have deepened the crisis.

Bangladesh Bank would have had to print hundreds of thousands of crores more. Inflation would have surged. The taka would have depreciated further against the dollar. Bangladesh’s credit rating abroad would have fallen. Foreign banks might have cut credit lines to Bangladeshi banks. On the other hand, stopping liquidity support would damage public confidence.

Ahsan H Mansur chose to stop the funds.

On 13 August, 2024, the unethical advantages enjoyed by seven banks were halted. This created serious difficulties. Hundreds of thousands of depositors suffered unprecedented hardship. But the broader economy was saved from an even greater disaster.

Later, however, the governor could not fully stick to the decision of withholding funds. Under pressure from various quarters and fearing public anger, he had to gradually provide liquidity support to these ailing banks. In my view, this was not ideal. What should have been done? Upon taking office, these banks should have been declared closed. After six months, they could have been merged with a state-owned bank and deposit repayments resumed. Since deposits in state-owned banks are considered safer, there would have been less pressure to withdraw funds.

He could not do this because the interim government was the weakest in Bangladesh’s history, lacking political authority and full coordination.
What else was needed? Punitive action against the corrupt directors of these seven banks. Confiscation of all their movable and immovable assets. Imprisonment of major loan defaulters. Action against central bank officials who approved the illegal CRR withdrawals.

The weak government could do none of this. Of course, these tasks were not easy—but they were not impossible either.

Despite limited capacity, Ahsan H Mansur achieved much. He reduced deficits in banks’ principal accounts, halted ongoing looting, reduced the government’s domestic borrowing, serviced foreign debt, stabilised the exchange rate, boosted remittance inflows, increased reserves, secured IMF disbursements, and initiated reforms in the banking sector.

His most significant step was forcing banks to disclose hidden bad loans. Total non-performing loans rose from Tk 3 trillion to Tk 7 trillion. Many call this his failure. I call it his greatest success.

A report published in Prothom Alo on 25 December, 2025 revealed alarming default rates: union Bank 96.64 per cent, First Security Islami Bank 96.20 per cent, Global Islami Bank 95.70 per cent, Padma Bank 94.17 per cent, ICB Islami Bank 91.38 per cent, AB Bank 84.04 per cent, National Bank 75.46 per cent, Janata Bank 73.18 per cent, Bangladesh Commerce Bank 71.11 per cent, BASIC Bank 70.59 per cent, Social Islami Bank 70.17 per cent, IFIC Bank 60.63 per cent, Islami Bank 58.24 per cent, EXIM Bank 56.86 per cent.

For example, union Bank had disbursed about Tk 270 billion in loans, almost all defaulted, while deposits stood at Tk 240 billion. First Security Islami Bank had disbursed around Tk 600 billion, nearly all defaulted, against Tk 450 billion in deposits. Global Islami Bank disbursed about Tk 130 billion, almost entirely defaulted, with Tk 130 billion in deposits. Much of this money was taken by Saiful Alam. There is virtually no prospect of recovery. Repayment would require taxpayers’ money.

After 5 August, the government injected billions of taka into troubled banks in phases. Bangladesh Bank provided these as loans: Tk 55 billion to First Security Islami Bank; Tk 50 billion to EXIM Bank; Tk 40 billion each to Social Islami and National Bank; Tk 20 billion each to Global Islami and union Bank.

None of these banks has the capacity to repay. More funds would be needed over time. These banks resemble black holes, generating losses. Public confidence has evaporated. Depositors may not withdraw everything immediately, but at the first opportunity, they likely will.

To sustain these banks, the government would have to print nearly all deposit amounts and bear heavy operating costs. You cannot fill a basket case. That is why the governor initiated the merger of five banks.

The benefits of bank mergers are hard to realise, but without them, conditions would worsen. By dissolving five banks and forming a single state-owned bank, the governor sought to restore confidence. In my view, however, mergers should have preceded liquidity support.

All policies have pros and cons. The governor at least tried. The shares of these banks were listed on stock exchanges, and ordinary investors held them. Trading was suspended during the merger. Of the Tk 58 billion paid-up capital, general investors held shares worth Tk 22 billion in book value.

About 2.2 billion shares were confiscated, angering investors. Perhaps shareholders could have been allotted shares in the new entity. But shareholders are residual claimants; they are paid only after all creditors.
The damage was done by Saiful Alam and other looters. Tough decisions were needed to save the economy. Someone had to do the dirty work.

Mansur also initiated liquidation of nine looted leasing companies. Before plundering banks, looters practiced on leasing firms. Almost all leasing companies were hollowed out. Liquidation was the best option.

Looters built foreign asset empires from stolen bank funds. Those assets belong to Bangladesh and should be recovered. Repatriating them is extremely difficult, almost impossible. Yet the governor tried, by hiring foreign lawyers, negotiating with foreign governments, and pursuing recovery.

Successful people are rarely popular. Doing the right thing means upsetting someone. Mansur made many enemies. Did he do everything right? No—he made one major mistake: he spoke too much.

A governor should communicate through a spokesperson and rarely appear directly before media. His frequent statements invited criticism.
Still, I will remember him as successful. That such a governor did not even receive a farewell reception is a regret I will carry for a long time.

* Chandan Aziz is a bank official and writes regularly on the banking sector.

* Views expressed are the author’s own.

* The op-ed, originally published in Prothom Alo print and online editions, has been rewritten in English by Galib Ashraf