Veteran economist Ahsan H Mansur was removed from his position as governor of Bangladesh Bank on Wednesday in the midst of an unprecedented internal upheaval marked by mob chaos inside the central bank headquarters.
The government cancelled his remaining tenure and appointed Mostakur Rahman as the new governor, raising serious concerns over institutional discipline and the future of ongoing banking sector reforms.
The dramatic developments unfolded shortly after Dr Mansur held a press briefing at Bangladesh Bank, following which discussions began over appointing a new governor.
He subsequently left the central bank premises and returned home, with officials formally bidding him farewell.
However, soon after his departure, tensions escalated sharply.
A group of Bangladesh Bank officials formed a mob and forcibly removed Ahsan Ullah, an adviser to the governor, from the premises.
Witnesses said around 30 officials chanted slogans and physically pushed him into a vehicle. additional director Towhidul Islam led the group, accompanied by executive director Sarwar Hossain, director Nowshad Mostafa, additional director Tanvir Ahmed, and others.
Some members of the group also attempted physical assault.
The incident is being seen as unprecedented in the history of Bangladesh Bank, raising alarm over the erosion of institutional discipline within the country’s top financial regulator.
The use of mob tactics inside the central bank has triggered concerns about its independence, internal governance, and credibility.
Removal comes in middle of reforms
Mansur had gained prominence for pursuing tough reforms aimed at stabilizing Bangladesh’s fragile banking sector. His initiatives included stricter oversight, restructuring weak banks, changes in bank boards, and stronger action against willful defaulters.
Efforts were also made to improve loan classification transparency and initiate legal proceedings against major defaulters.
One of his most significant steps was the merger of five weak Islamic banks—Exim Bank, Social Islami Bank, First Security Islami Bank, Global Islami Bank, and Union Bank—into a single consolidated entity. The government provided capital support to stabilize the merged institution and restore depositor confidence.
However, these strict measures triggered internal resistance.
Some central bank officials accused him of authoritarian leadership, and disciplinary actions against certain officials further intensified tensions, which eventually spilled into open confrontation.
Administrative decision raises questions
The government order stated that Mansur’s remaining tenure was cancelled in the public interest.
However, Mansur said he had neither resigned nor been formally informed prior to the announcement, stating that he learned of the decision through media reports.
Former finance adviser Salehuddin Ahmed said the sudden removal does not send a positive signal.
He noted that Mansur, an experienced economist, had taken important reform measures, including the consolidation of weak banks.
Ahmed added that while the government has the authority to change policy direction, such decisions carry significant implications for financial stability and international confidence.
Economists and analysts say the removal is not merely an administrative reshuffle but a decision that could reshape the direction of Bangladesh’s financial sector. It has raised broader concerns over whether reforms are institutionally driven or dependent on individual leadership.
Structural reforms remain incomplete
Key reform initiatives included strengthening Bangladesh Bank’s autonomy through amendments to the Bangladesh Bank Order, 1972, and revising the Bank Company Act to limit ownership concentration and improve governance.
Proposals also aimed to reduce government influence on the central bank board and enhance regulatory independence.
However, these structural reforms remain stalled and unimplemented.
Although the government introduced the Bank Resolution Ordinance and Deposit Insurance Ordinance to manage failing banks and protect depositors, these measures do not address deeper structural weaknesses such as political influence, poor governance, and rising non-performing loans.
The International Monetary Fund has also recommended strengthening central bank independence under its $5.5 billion loan program, but progress has been limited.
New governor faces critical test
New governor Mostakur Rahman, a cost and management accountant with strong ties to the industrial sector, now faces a difficult task.
His appointment has already sparked debate over potential conflicts of interest, given his business background.
His immediate challenges include maintaining reform continuity, restoring institutional discipline, strengthening regulatory credibility, addressing rising loan defaults, stabilizing weak banks, and rebuilding market and depositor confidence.
The removal of Mansur amid mob-driven chaos marks a critical turning point for Bangladesh’s banking sector. Whether reforms continue or stall will depend on whether they are sustained through institutional commitment rather than individual leadership.