Political stability essential to ensure governance and accountability in the banking sector

Economic Reporter :Former Bangladesh Bank Governor Salehuddin Ahmed said, banks need to be free of political pressure for ensuring good governance and accountability in the banking sector.Banking sector reforms will not be beneficial unless banks are freed of political influence and pressure, said the former governor.Salehuddin Ahmed made the comment at a roundtable on 'banking sector reforms and governance' in Bangladesh in Dhaka recently.Political stability is essential to ensure governance and accountability in the banking sector; otherwise all initiatives for reforms will not be effective.He said, the initiatives of Bangladesh Bank in this regard are fairly good and that have to be complied to get better results in the banking sector.He called upon the central bank to play pivotal role for ensuring development of the sector and enhancing monitoring the activities of the commercial banks."Governance and accountability should be increased further in Bangladesh's banking sector. For this political will is required. Politicians should bear in mind that a sector like banking should always be free of political influence," he said.He said even if appointments were made on the basis of political affiliations in the banks, the appointees should be clearly told not to discuss their political ideologies in the banking sector.CPD Executive Director Mustafizur Rahman has underscored the need for ensuring political stability and institutional reform with a view to establishing good governance in the banking sector as well as boosting the economy of the country.The establishment of good governance in the financial sector and the institutions would help attaining sustainable economic growth, said the CPD Executive to The New Nation recently."It is not possible to ensure proper development without strengthening the country's institutional capacity and good governance", he said.The unresolved political uncertainty is hurting the growth prospects by hindering confidence rebuilding, leading to a stagnation of private investment, claimed Mustafizur Rahman.The domestic risks including political uncertainty, constraints in infrastructure and institutional reforms, and financial sector vulnerability are hampering the investment and productivity, he mentioned.There is s close relation between financial stability and political stability. Both things are crucial for investor and smooth trade to sustain the growth momentum and the impressive feat in lowing poverty, pointed the CPD Executive.