DHAKA: The world knows I am a banker of the poor and a governor of the poor as well. But all must also know that I never cause any harm to the riches.

Bangladesh Bank governor Dr Atiur Rahman was telling all these to Banglanews in an exclusive interview.

The detailed interview has brought different aspects of the present economy of the country and also has highlighted the areas of future prospects. The recently announced monetary policy, the volume of reserve, the inflation, fuel prices, agricultural and rural economy - all these has come up in the discussion.

How the huge amount of foreign currency reserve will be used was also a major point of discussion while the controversial issues of Hall-Mark and Bismillah Group loan scandal were also discussed.

Following is the detail interview of the central bank governor:

Banglanews: Would you please explain the present situation of micro economy in the country?

Dr Atiur Rahman: All the indexes of our economy now at a stable condition. Which is really good, as fluctuation in the indexes are common in many countries. But in our economy we have been experiencing stabilities for years together. The main reason behind is the political stability in the country. If there were a political chaos it could be really difficult to maintain the stability, I must say.

Banglanews: Shall the rate of inflation remain within the level of tolerance under the monetary policy you have just announced?

Dr Atiur Rahman: The biggest concern in micro economy is keeping the inflation rate within the tolerance level. For years we have been keeping the inflation rate within a comfortable rate. Once the rate was as high as 11.5 percent, which we have slowly reduced. And one must admit that it was possible due to our correct and wise policies. We had to emphasis on agricultural production, small and medium enterprises, and big industries as well. We kept our eyes fixed on ensuring the supply regular. For better agricultural production we increased the amount agri-loan and incentives. Even the share cropper were provided with loans. We extended our hand up to the extra-food price-inflation and that has resulted with keeping the price of food within the level of purchasing capacity of the general people. In recent past the core inflation was a little high and that is why we have announced a moderate self-controlled monetary policy. It is our decision that we will always keep the core-inflation under control. This is necessary for the poor people. Because, when the prices of food, clothes, house-rent go up the poor can not afford. So the price inflation is the biggest enemy of the poor people.

Banglanews: Shall you be recommending the government to reduce the fuel price to keep the price inflation under control?

Dr Atiur Rahman: We have a favourable point with us that the fuel price has internationally been reduced. But we are yet to ensure our people to enjoy the benefit. This is due to government’s policy. Government wants to reduce the level of subsidies in fuel price. You can say no subsidy is there now. So now government can easily reduce the fuel price. Another thing is fuel causes environment pollution. So there are apprehensions that a reduced price of energy may enhance pollution as people will be discouraged with using more and more environment friendly solar panel and renewable energy. My personal opinion is we must keep a balance. We can reduce the fuel price a little, and Bangladesh Bank easily can recommend for that. Simultaneously we should increase subsidies for renewable energy. If both go hand in hand a long-term economic growth can be dreamed.

As I see government is well aware of it. There are indications of not increasing the prices of both power and gas just now. I believe, government will consider the demand of the people of the country.

Banglanews: We now have twenty five billion Dollar of foreign currency reserve. Does the bank has any plan to use this huge amount?

Dr Atiur Rahman: We are doing good in having foreign currencies, last year our remittance increased by 7.5 percent. We received 15.3 billion of remittances which is a record for a country like us. The flow of remittance has increased by twice in last six years. Our export earning has also increased. Few months back it was highly hampered by the political instability. Political violence forced foreign investors not to come here, which had a negative impact. We also got afraid. However, now the situation is changed, and we are eyeing on a 7 percent growth in export earning for the upcoming year. This is also good that the imports have also increased. 65 percent of the country’s imports are now capital machineries and industrial raw materials. And I believe all these are contributing to enhancing the export capacity of the country. But there are imbalances in foreign currency exchanges as the growth rates vary in export (4 percent) and import (12 percent). Still, we are not anxious of it, because it is showing an indication of enhancing our future capacity.

Moreover, due to high reserve we can think of exploring new areas of export and industry. We have already allocate 200 million dollar from the reserve for small and long term green financing. A Green Textile has been established in Narayanganj by using money from this fund. If needed, we will allocate more money for this purpose. With the support of World Bank we have also allocate 300 million dollar for medium and long-term production in new and old industries. Besides some 100 million dollar allocations for small and medium industries in cooperation with JICA are also there.

We, not only allocate money, but also provide various types of cooperation to the industry sector of the country. We do advocacy with investors and international fund givers for industrial investments. Recently we contributed to collecting fund for establishing a Garment Village in Munshiganj from China on request of BGMEA president.  And thus Bangladesh Bank has been contributing in industrialization in the country from behind the scene.    

Banglanews: What about the progress of Sovereign Wealth Fund?

Dr Atiur Rahman: We have already formed a committee regarding the Sovereign Wealth Fund. The fund with volume of between 1 to 2 billion dollars will be created as per recommendation of the committee. Moreover, we will introduce ‘Off Shore Taka Bond’ of 1 billion dollars. We are working with International Finance Corporation (IFC). We will expend the money for infrastructural development both in public and private sector. Tk 200-crore will be spent for dairy farms. An account refunding Tk 100-crore has been established for new tea cultivators.

In the monetary policy, we have clearly said that we will assist industries sector. I think 7 percent growth is possible to attain. I do not forecast any political unrest in next six months or one year. So it will strengthen confidence on business. I hope, this year GDP will stay above 7 percent.

Banglanews: What is the foreign response regarding Bangladesh Bank Green Financing Program?

Dr Atiur Rahman: We have already allocated 200 million dollars for ‘Green Fund’. We will spend a part of the 300 million dollars for infrastructural development. We will also accept if any agency comes forward. Our initiatives in providing loan in environment-friendly business have earned praise. Global Infrastructure Facility (GIF), a green business wing of World Bank has accredited Bangladesh Bank. So we will get money from the fund for environment-friendly projects. Bangladesh Bank is now a developmental central bank. China has learnt from us, but they could not advance like us. The developmental central bank is a new concept. The world is learning from Bangladesh. The country is being honored as the pioneer.

Banglanews: Housing sector has been demanding for a separate fund for a long, even then the housing fund is almost empty. Is there any initiative to open it?

Dr Atiur Rahman: Housing Fund is active. We tightened monetary policy to rein inflation. Then we closed the fund. Now, we are actively thinking about the ability of lower income people to purchase a house or flat from 600 to 1,000 square feet. It will depend on inflation. We will do this when inflation rate will reduce.

Banglanews: Amid scores of success, the scams of Hallmark and Bismillah Group are dragging Bangladesh Bank downwards. What kind of initiatives have been taking to stop this sort of embezzlement?

Dr Atiur Rahman: It is not time to explain the issues. But we have taken initiatives so that this kind of embezzlement can not take place. We have strengthened supervision by digitalizing the sector. So Bangladesh Bank will now know if there are any irregularities. There were also some loopholes in the central bank, especially, the MD and the Risk Management department used to pay little attention on the movement of a large bulk of money from one branch to another.

Now, we have taken such initiatives that the MD and Audit Committee Chairman inform me every three months about their initiatives. Everyday, Bangladesh Bank fines banks for their irregularities. Many people have lost their jobs for this reason. These initiatives have brought some sort of disciplines back in the banks. Complaints about IBP are rarely heard as we have strict our supervision. For example, we have compelled Sonali Bank to pay bills of other banks regarding Hallmark scam. Now, no foreigners worry about their investment in Bangladesh.

Recently, a Switzerland businessman told me that a CEO of a foreign bank has opined that there is no worry regarding non-payment of L/C money as Bangladesh Bank is strict on this issue. It has improved our country ranking. We are staying at rank 5 while Pakistan is at 7. We have opened five departments for supervision. We have engaged a specialist of DGM level for a bank (for supervision). The DGM is accountable to me for any irregularities.

Banglanews: Recently finance minister had said that many steps can not be taken due to political influence. What do you think?

Dr Atiur Rahman: We do not face this kind of problem. We maintain neutrality. Political influence retains in every country. But it cannot hamper the activities of the central bank. Perhaps, he (the finance minister) had indicated the executive council of the government banks. But we have also improved the situation there. Now, we make enquiries about their matters.

Banglanews: You are returning money to others taking from Sonali Bank. But the bank cannot recover its money from Hallmark.

Dr Atiur Rahman: Hallmark did not take money from Sonali Bank as loan. So the bank cannot recovery the money. It was embezzlement. So it did not follow any discipline. The money can be got back if the law enforcers consider it a robbery. We have made bars so that no more scam of this kind can take place.

Banglanews: Do you think that BASIC Bank and Sonali Bank will be able to come back from the trauma?

Dr Atiur Rahman: We had stopped ‘bleeding’ of BASIC Bank. We sent there observers and gradually took it in our control. Later, we brought changes it its executive council. We had expelled its MD. Now, it is trying to a normalcy. I hope it will stand on its feet. We have rescheduled some loans. But it does not mean that the thieves will get mercy. We have submitted our investigation reports to the law enforcers and Anti Corruption Commission (ACC). Hope they will take action.

Banglanews: You said in a finance ministry affairs standing committee meeting that ACC submitted all proves. But they are not taking actions.

Dr Atiur Rahman: I said earlier that they are separate organizations from us. You should ask them about their matter. We are just doing our duties.

Banglanews: What is your opinion about new banks?

Dr Atiur Rahman: Till now, the new banks are doing good as they do not have loan defaulter. Some companies faced problem with recruitment, a director resigned and later returned with legal protection. All happened because of they are new. But we are monitoring the banks and we will take actions if they do any irregularities.

Banglanews: Bangladesh Bank in an individual organization, but it did not activate the unique pay scale. All processes had been finished except the notification.

Dr Atiur Rahman: Former Bangladesh Bank (BB) governor Farasuddin Ahmed told me that he sent a proposal about the pay scale to the government and we expected that the government will pay heed to the issue that time. As BB is the bank of the government, they will take decision about it. Before that, incumbent prime minister and finance minister have approved the matter. The law division has also given vetting. Now, we are waiting for its implementation.

Banglanews: The designation of central bank’s governor is not same as the other countries.

Dr Atiur Rahman: Talking about this is embarrassing for me. I thing all central banks are autonomous and it should be independent. Recently, Indian Prime Minister Narendra Modi said India’s economy will get harm if anyone tries to capture reserve bank’s autonomy and independence.

Our Prime Minister Sheikh Hasina also followed the same ideology, that’s why BB did everything. What you are talking about is a structural thing and it is a long time procedure. It also depends on a nation’s perception.

Banglanews: What is the position of BB on people’s interest to invest in foreign land?

Dr Atiur Rahman: We are giving permission to the good industries to invest in other countries, such as medicine. Recently, we approved three medicine producing companies. We also approved a company to produce petroleum products in Myanmar, another company in Ethiopia for readymade garments. But, we are encouraging people to invest in Bangladesh rather than foreign land as it will create job opportunity at home.

Banglanews: Person Atiur Rahman’s future plan and your thoughts about country’s economy and bank sector as governor.

Dr Atiur Rahman: I am satisfied now. As a teacher, I was worried about my responsibilities as governor. It is a big organization where about 6,000 people are working under my command. But, it becomes possible as prime minister, government body, my family and colleagues are helping me. Farmers, small and large entrepreneurs also helped me in my works.

I am the governor of people, or general people’s governor. The whole world knows me an economist for poor and I am the governor of poor people. But I do not hurt the rich people as I know a county belongs to both poor and rich people.

BDST: 2222 HRS, AUG 04, 2015
BD/RR/SMS/MMk