Bangladesh Bank (BB) Governor Dr. Ahsan H. Mansur has once again warned against taking ownership, through transfer, purchase or any other means, of any assets of the S. Alam Group, which has become a symbol of rampant crony capitalism under the 15-year rule of the previous Awami League-led government.
Anyone found to have bought S Alam Group companies, assets or anything else will have to forfeit them, the governor said at a press conference at the central bank headquarters on Sunday.
He said the foreign exchange reserves have increased by USD $300 million as the central bank stopped selling dollars in the market, in perhaps the most significant departure from the previous administration's policies. Prior to Dr Mansur's appointment as governor on August 14, Bangladesh Bank was leaking about $1.1 billion each month through dollar sales from the reserves.
At present, the foreign exchange reserves amount to $21 billion as per IMF formula, i.e. the universally accepted definition of forex reserves.
Dr. Mansur said that the foreign exchange market has become stable now, and gradually it will be normal as the flow of remittances and foreign aid increase, side-by-side with the checks on money laundering.
The central bank has also fully secured 95 percent of deposits in the banking system by doubling the scope of the deposit insurance scheme. Now if any bank goes bankrupt, 94.6 percent of depositors of the bank will be refunded immediately from this scheme. So depositors have nothing to worry about regarding their deposits in even so-called weak banks, assured the governor.
He urged depositors to be patient and trust in the banking sector reform program being implemented by his team at the central bank.
Dr Mansur said, "We do not expect any bank to go bankrupt, but at least 10 banks have gone into a state of near-bankruptcy. The government is trying to save them."
Regarding the freezing of bank accounts, the governor said, "So far we have not seized the account of any organization. Be it S Alam's or Salman F Rahman's. No organization's bank account has been seized. All individual accounts whose accounts have been frozen."
"We do not want to join any business. We don't want job loss and production disruption of institutions and companies," he pointed out.
Dr. Mansur also said, "The central bank has money for SME loans. But I can't give to small entrepreneurs. Not only that, the World Bank and the IMF want to invest in small entrepreneurs. But due to some problem these loans are not being distributed through the banks."
Therefore, Bangladesh Bank has asked these banks to explain the cause and propose solutions in writing.
The governor is hopeful that the flow of microcredit will increase very soon, and confirmed that a special taskforce on banking sector reforms will start their work within the next ten days.
He said that through the course they have envisioned, the banking sector's problems will be resolved and the previous policies will be reviewed.
"If any policy is found to be made only for a few businesses then it is void," he said, adding: "And if needed, it will remain."
He also assured that the directors from the same family dominating bank boards will be removed.
