Weak move by government in appointing governor: CPD

The Centre for Policy Dialogue (CPD) has said the government took a "weak move" in appointing the new governor of Bangladesh Bank. According to the organisation, the appointment process lacked transparency and the government had the opportunity to choose a more qualified person.

Dr Khondaker Golam Moazzem Hossain, research director of the organisation, made the remarks at a media briefing titled "Policy and Administrative Decisions in Economic and Social Sectors of the New Government: 180 Days and Beyond" at the CPD office in Dhanmondi on Saturday, February 28.

Regarding the governor's appointment, he said the government could have made a better appointment if it wished to avoid criticism linking the current governor to defaulted loans and allegations of taking special benefits.

In his words, there is a lack of transparency and criteria-based process in appointing the governor.

Speaking about recent financial sector reforms, Dr Moazzem praised the role of the recently former governor. He said many of the reforms in the financial sector were driven by individual initiative. Although interest groups created obstacles in the reform process, it was advanced through logic and debate. Experienced leadership needed to continue to maintain this momentum.

Noting the lack of specific criteria for appointing the central bank governor in Bangladesh, he said currently there is no clear qualification framework except a minimum age of 35. In future, this process should be brought under a legal framework with determined criteria.

In this context, he cited the example of the Reserve Bank of India, where a committee under the finance ministry selects candidates based on at least 20 years of experience, institutional management capability and higher educational qualifications, followed by interviews. CPD recommended forming a screening committee for appointing the governor and other important state positions in Bangladesh through a shortlist.

Warning about the government's tendency towards "deregulation" of the capital market, he said strict oversight and a strong regulatory framework are still necessary given the existing weaknesses in the financial sector.