The interim government of Bangladesh has mandated the termination of contracts for the managing directors and CEOs of six state-owned banks—Sonali, Janata, Agrani, Rupali, BASIC, and Bangladesh Development Bank—as part of ongoing banking sector reforms. This decision, communicated by the Financial Institutions Division (FID), marks the first removal of top executives since Sheikh Hasina’s resignation in August. Policymakers believe that retaining the current MDs would hinder necessary reforms, especially given allegations of corruption linked to these executives, who are accused of facilitating loans for political allies. The banks are struggling with high non-performing loans (NPLs), with Janata Bank reporting a staggering 52% NPL ratio and BASIC Bank at 65%. In response, the central bank has established a task force led by Governor Ahsan H Mansur to drive reform initiatives, including the publication of a white paper on the sector’s challenges and proposed solutions.
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