Once known as a “magician of finance,” Riad Salameh was the Governor of the Central Bank of Lebanon. He was one of the longest-serving central bank governors in the world, having held the position for 30 consecutive years, from 1993 to 2023. But shortly after his tenure ended, various allegations of embezzlement, money laundering and other financial irregularities were brought against him. Ultimately, in 2024, the Governor of Banque Du Liban was arrested and sent to prison.
Another incident of a governor facing arrest and trial occurred in Angola. Valter Filipe da Silva, the Governor of the Central Bank of this Central African nation, was dismissed in 2017. He was accused of attempting to illegally transfer $500 million abroad from the National Bank of Angola. In 2020, a court convicted him. Along with him, several other government officials were also tried in this case, including the son of the country’s former president.
Beyond developing or impoverished nations, allegations of involvement in irregularities and corruption have surfaced against a central bank governor in a developed country like Germany in the current century. In 2004, Ernst Welteke was forced to resign from the post of President of Germany’s central bank (Deutsche Bundesbank). The allegation was that a private bank had covered the hotel stay expenses (approximately €7,700) for the governor and his family at a luxury hotel in Berlin. Despite prosecutors in Frankfurt investigating the matter, no criminal charges were ultimately filed. But Welteke had to pay a fine of 25,000 Euros as a result of the incident.
While allegations of isolated irregularities, corruption or conflicts of interest have surfaced against central bank governors or senior officials in many countries around the world, such extensive allegations — as seen against Bangladesh Bank — are unheard of elsewhere. The Anti-Corruption Commission (ACC) is currently investigating all three governors who served at Bangladesh Bank over the decade and a half following 2009. Along with these governors, at least 55 other officials, including seven deputy governors who served at different times and numerous executive directors, have been caught in the net of investigations. Legal actions, including the filing of cases, investigations, freezing of assets, and summoning of documents, have been taken against them. Among them, the influential former deputy governor Sitangshu Kumar Sur (SK Sur) Chowdhury and former head of the Bangladesh Financial Intelligence Unit (BFIU) Masud Biswas have been arrested. There is no trace of former governors Dr Atiur Rahman and Abdur Rouf Talukder, and many former deputy governors are also keeping out of the public eye.
Economists and concerned stakeholders state that at one time, central bank governors or chiefs worldwide were regarded as national heroes. Those appointed to these positions were individuals whose statements would instil confidence in the market. Officials holding other key positions in the central bank also enjoyed extra honour and prestige. But the “era of celebrity central bankers” is coming to an end globally. In Bangladesh, that image is facing an even greater crisis. Having become known as accomplices to the oligarchs who looted banks during the ousted Awami League regime, central bank officials are also in an uncomfortable position.
The experience and remarks of Arif Hossain Khan, spokesperson and executive director of Bangladesh Bank, reflect this sentiment. He told Bonik Barta, “The central bank is the regulator of any country’s banks and financial sector. It’s the institution’s responsibility to act as the guardian of the banking sector and play an effective role in establishing good governance. Now, if ACC files cases against the central bank’s officials, including the Governor, and questions the integrity and ethics of the policymakers, it’s only natural that there will be a lack of public trust. When information is sought on three consecutive governors and all directors of a country’s central bank, it also sends a negative message to the international community.” In the decade and a half following 2009, no one in Bangladesh was truly independent except the Prime Minister (who was ousted in the 2024 mass uprising), he also remarked.
After the global financial crisis of 2008, central bankers became one of the most influential and respected classes of financial policymakers in the world. When politicians in various countries were struggling to cope with the crisis, the central bankers took on the responsibility of saving the economy from collapse. By lowering interest rates, injecting massive liquidity into the banking system, and stabilising financial markets, they became the primary stewards of the global economy. At that time, central bankers like Ben Bernanke, chairman of the US Federal Reserve; Mario Draghi, president of the European Central Bank; and Mark Carney, governor of the Bank of England, were not just economists; they attained the status of near-folk heroes.
To many, they were skilled policymakers operating outside of politics who could make pragmatic decisions during difficult times. These three economists were also rewarded for their service: Ben Bernanke, former chairman of the Federal Reserve, won the Nobel Prize in Economics in 2022; Mario Draghi, president of the European Central Bank, assumed the position of Prime Minister of Italy; and former Bank of England Governor Mark Carney took on the responsibility of the Canadian Prime Minister.
In this regard, the situation in Bangladesh is completely the opposite. Dr Atiur Rahman served as the Governor of Bangladesh Bank for nearly eight years after 2009. He resigned from the post of Governor on March 15, 2016, amidst intense criticism over the incident of the foreign exchange reserve theft. During his tenure, irregularities and corruption in the country’s banking sector began to take institutional form. The looting of BASIC Bank, the Hallmark scandal at Sonali Bank, and the Bismillah Group scandal at Janata Bank, along with the rising influence of oligarchs in private banks, all began during this period. Following the fall of Sheikh Hasina on August 5, 2024, in a mass uprising, Atiur Rahman also fled the country. Once known as the “economist for the poor,” this former professor of Dhaka University now faces the looming threat of the reserve theft case. In the draft charge sheet prepared by the Criminal Investigation Department (CID) of the police regarding the reserve theft, Atiur Rahman has also been named as an accused.
During the tenure of Atiur Rahman and subsequently Governor Fazle Kabir, Sitangshu Kumar (SK Sur) Chowdhury was an influential Deputy Governor of Bangladesh Bank. He was arrested by ACC on January 14 of last year. Following his arrest, a search of his secret locker in the central bank’s vault led to the seizure of assets worth BDT 47.5 million. This included 1 kg and 5 grams of gold, $169,300 and €55,000.
Subsequently, the former BFIU Head Masud Biswas was arrested on charges of acquiring assets beyond his known sources of income. On January 17 of last year, the ACC, with the assistance of the Dhaka Metropolitan Police (DMP), arrested him. This official, who held the rank of deputy governor at the central bank, has been accused of acquiring assets worth BDT 18.7 million that are disproportionate to his known sources of income.
Former Finance Secretary Fazle Kabir served as the Governor of Bangladesh Bank from March 20, 2016, to July 3, 2022. Following him, Abdur Rouf Talukder served as the Governor from July 2022 to August 9, 2024. Prior to taking this role, he also served as the finance secretary. The ACC has summoned their bank accounts, assets, and all records from their tenures, following allegations that they provided policy-level support to various business groups, including the S Alam Group, to siphon off billions of taka. The agency has also summoned information and relevant documents regarding all members of the central bank’s board of directors from the 15-year period since 2009. An ACC-sent letter to Bangladesh Bank on June 11 stated that a three-member investigation team has been formed to probe the allegations, with Deputy Director Md Momenul Islam as the team leader, and Deputy Director Ranjit Kumar Karmakar and Deputy Assistant Director Md Yasin Molla as members.
Mohammad Muslim Chowdhury, former finance secretary and comptroller and auditor general (CAG), believes that the irregularities and corruption occurring in Bangladesh’s banking sector are exceptional compared to any other country in the world. He told Bonik Barta, “When a state is held hostage, its impact permeates every pore of the system. It doesn’t seem that any Governor of Bangladesh Bank was independent in the period following 2009. Whatever happened there’s a result of the state being held hostage.”
While officials of the central bank succumbed to the pressure of the ousted government, there are different examples in neighbouring India. Despite various irregularities and corruption having occurred in that country’s banking sector, no serious allegations have been raised against the Governor or senior officials of the Reserve Bank of India (RBI). No Governor or senior official has been arrested either. Instead, Raghuram Rajan, who served as the governor of the Reserve Bank of India from 2013 to 2016, set monetary policy and interest rates by ignoring the government’s demands. RBI Governor Urjit Patel also resigned due to disagreements with the Narendra Modi government, particularly over the use of the central bank’s reserves and policy independence.
Questions have been raised at various times regarding conflicts of interest involving some deputy governors of India’s central bank. Specifically, there was criticism of the RBI’s oversight following the Punjab National Bank fraud and the Infrastructure Leasing & Financial Services (IL&FS) crisis. But even in these instances, no deputy governor was arrested or charged with criminal offences due to corruption. India has reaped the benefits of good governance in its financial sector. The non-performing loan (NPL) ratio in the banking sector of the world’s most populous country is now 2.2 percent, whereas one-third of the total loans in Bangladesh’s banking sector are now classified as non-performing.
No Governor or senior official of Pakistan’s central bank has been seen facing arrest or criminal investigation on charges of corruption. Similarly, in the case of the central banks of Sri Lanka and Nepal, while governors have primarily faced policy-related and administrative criticism, incidents of arrest or criminal prosecution on charges of personal corruption are rare.
Former Governor Dr Salehuddin Ahmed commented that what has happened at Bangladesh Bank in the period since 2009 does not fit into any definition or standard of reasoning. He told Bonik Barta, “A central bank may make mistakes in the decision-making process for adopting or implementing policies. Due to technical reasons, non-performing loans may increase, or a bank may perform poorly. Minor lapses have occurred at Bangladesh Bank in the past as well. But for a country’s central bank to become an accomplice to irregularities and corruption as a whole is rare globally. I ain’t aware of any other such instance in the world.”
He served as the finance adviser to the former interim government led by Dr Muhammad Yunus. During his tenure, there were significant discussions regarding ensuring the autonomy of Bangladesh Bank, including increasing the status and authority of the Governor. A draft for amending the Bangladesh Bank Order was even finalised to this effect. But the interim government ultimately did not implement it.
Regarding this matter, Dr Salehuddin Ahmed told Bonik Barta, “A person exercising absolute power, including autonomy, must be honest. If the individual is dishonest, absolute power further encourages corruption. Given the process through which most Bangladesh Bank officials worked during the period after 2009 and the extent of the irregularities and corruption they were involved in, autonomy or increased power wouldn’t have resulted in anything good. For this reason, I didn’t support the amendment of the Bangladesh Bank Order. First of all, good governance must be established within Bangladesh Bank. If central bank officials follow the rules and regulations, the banking sector will be forced to return to the right track.”
Due to the irregularities and corruption that took place over the decade and a half following 2009, the country’s banking sector is now in a devastated and fragile state. More than two dozen banks are facing capital shortfalls. At least a dozen banks are also failing to return depositors’ money. In 2009, the volume of non-performing loans (NPLs) in the banking sector was only BDT 220 billion; by September 2025, it had reached around BDT 6.44 trillion. At that time, 35.73 percent of the total loans distributed by banks were non-performing. In the last three months of last year, NPLs were reduced slightly by offering special concessions for loan rescheduling. But even then, at the end of March this year, the volume of NPLs stood at roughly BDT 5.88 trillion, which is 32.26 percent of the total loans distributed. Statistics show that the existing rate of NPL’s in the country is the highest in the entire world.
While one-third of the loans distributed by banks in Bangladesh are non-performing, this rate in neighbouring India is now only 2.2 percent. Meanwhile, Pakistan’s non-performing loan rate has dropped to 5.8 percent. Even in Sri Lanka, which was on the verge of bankruptcy three years ago, the NPL rate remains within the single-digit range.
Many banks are unable to maintain the required provision or security reserve against their non-performing loans. The capital shortfall in the banking sector has consequently taken a severe turn. The Capital Adequacy Ratio (CAR) of the country’s banking sector had plummeted to a negative 2.64 percent by the end of last year, according to central bank data. Under the internationally recognised Basel-III framework, in contrast, the CAR is expected to be at least 12.50 percent. For the average capital adequacy of a banking sector in any functioning economy to move into the negative territory is considered a rare event in the modern world.
While the banking sector in Bangladesh has slipped into a negative trend, the CAR of banks in India, Pakistan and Sri Lanka has become stronger than before during the same period. The CAR in Pakistan’s banking sector is now nearly 21 percent, while in Sri Lanka’s banking sector, this rate is over 19 percent. The average CAR of Indian banks stands at 17.20 percent, according to the Financial Stability Report 2025 published by Bangladesh Bank. This is noteworthy despite the fact that, just three years ago, both the South Asian island nation of Sri Lanka and Pakistan were on the verge of economic bankruptcy.