Former finance adviser to the interim government and former governor of Bangladesh Bank Salehuddin Ahmed said that caution and firmness are needed in approving new bank licences to maintain the stability of Bangladesh's banking sector.
He said that considering the risks of the financial sector, there must be a preparation to reject new bank licence applications with courage.
He said these as keynote speaker at the “Risk Conference on Banking and Finance 2026” organized by Difin and DNET in Gulshan, Gulshan, on Saturday (April 11).
Ahmed said that during his tenure as the governor of Bangladesh Bank, he received many proposals to grant new bank licences. However, in those cases, the issues of technical capacity, policy framework and overall financial stability were seriously considered.
He said that currently, depositors are facing various problems while withdrawing money from some of the weak banks in the country. This reality makes it clear that it is necessary to be very careful while granting licences to new banks.
Therefore, a bold decision should be taken to reject the licence application if necessary.
Highlighting the importance of risk management in the banking sector, he said that financial institutions need to develop a strong compliance culture. When the economy weakens, its impact is not only on the banking sector but also on the entire financial system.
Referring to financial inclusion, the former governor said that it is possible to bring a large population of the country under the financial system through technology-based solutions and expansion of digital financial services.
At the same time, he advised depositors to be careful and said that keeping money in weak banks under the lure of high interest rates increases the risk. Initiatives have already been taken to merge some such banks, which is important for maintaining the stability of the banking sector.
Regarding the insurance sector, Salehuddin Ahmed said that despite the potential to play an important role in the economy, this sector often suffers from a crisis of confidence and often faces allegations of fraud. To change this situation, it is important to ensure effective supervision and transparency.
He further said that it is necessary to assess the financial capacity and awareness of the customer before granting loans. In addition, proper implementation of strong risk management policies can ensure sustainable development of the banking sector.
