Loan defaults, politics and power: Why Bangladesh’s new central bank chief is facing intense backlash | Explained

File photos of Mostaqur Rahman (L) and Bangladesh PM Tarique Rahman (R).

Mostaqur Rahman's appointment as Bangladesh Bank governor faces criticism over his lack of central banking experience and alleged loan defaults, with concerns that replacing respected economist Ahsan Mansur could undermine the financial sector's integrity.

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The appointment of Mostaqur Rahman as Governor of Bangladesh Bank has sparked a fierce backlash across Bangladesh’s political and economic landscape, with critics questioning both his credentials and the manner in which his predecessor was removed.

The controversy erupted after the sudden exit of Ahsan Habib Mansur, a respected economist who had been appointed during the Muhammad Yunus-led interim regime. Mansur’s tenure was cut short years before its scheduled end in 2028, and his removal paved the way for the appointment of Mostaqur by the Bangladesh Nationalist Party government led by Tarique Rahman.

Mansur himself said he was not formally informed of his dismissal. “I have not resigned, nor have I been removed. I saw it in the media, so I am going home,” he told reporters as he left Bangladesh Bank headquarters amid protests, according to The Daily Star.

Who is Mostaqur Rahman?

Mostaqur’s elevation marks a sharp departure from tradition. The post of Bangladesh Bank governor has historically been reserved for senior bankers, economists, or career civil servants with deep monetary policy experience.

By contrast, Mostaqur is a garment sector businessman. He is a cost and management accountant by training and the managing director of Hera Sweaters Ltd. He has no direct background in central banking or monetary policy. He has also been politically active, serving on the BNP’s central election steering committee and holding positions in multiple business associations.

Loan defaults and conflict of interest concerns

The most damaging criticism against Mostaqur relates to his financial record. According to The Daily Star, Mutual Trust Bank rescheduled Tk 89 crore in stressed loans for Hera Sweaters Ltd just months before his appointment. The restructuring was done under Bangladesh Bank’s special policy, granting a 10-year repayment period with a two-year grace period.

Senior bankers have openly questioned the appointment. One managing director of a commercial bank told The Daily Star, “How can someone who rescheduled loans for his own company under special terms work in the interest of the country’s banks?”

BDNews24 reported that Hera Sweaters failed to repay a Tk 860 million loan from Mutual Trust Bank on schedule, fuelling concerns about regulatory independence.

Former Dhaka University economics professor Deen Islam wrote on Facebook, “Appointing a garment industrialist and BGMEA standing committee chair as central bank governor sends the wrong signal. Regardless of his experience, the conflict of interest is obvious. How can Bangladesh Bank remain independent if it is led by an active business figure from a sector it must regulate.”

The shock removal of Ahsan Mansur

The anger over Mostaqur’s appointment is inseparable from the manner in which Mansur was removed. His dismissal followed protests by a group of officials accusing him of “autocratic behaviour”, a charge he rejected as a “conspiracy”.

The Financial Institutions Division later cancelled the remainder of his term, barely 18 months into his four-year tenure.

Mansur’s exit surprised many because of his economic record. Under his leadership, foreign exchange reserves rose sharply and inflation eased. According to The Daily Star, gross reserves climbed from $25.92 billion to $35.04 billion, while inflation fell from 10.49 percent in 2024 to 8.58 percent in January 2026.

Political backlash grows

Jamaat-e-Islami chief Shafiqur Rahman described the episode as “the formal beginning of mob culture backed by the current government”.

“No one has the right to humiliate respected figures such as the Governor of Bangladesh Bank and his advisers in this manner,” he wrote on Facebook, warning that such actions “will destroy whatever remains of the economy”.

Former HSBC director Shahir Chowdhury wrote, “Which is why it is deeply disappointing to see someone of that experience and evidential track record not allowed to continue his tenure.”

NCP leader Nahid Islam accused the government of reopening the door to financial plunder, saying, “There is no scope to believe that the country’s highest banking authority and financial sector will remain safe in the hands of such an unethical beneficiary businessman.”

As criticism mounts, Mostaqur Rahman’s appointment is increasingly seen not as administrative reform, but as a politically driven move that risks undermining confidence in Bangladesh’s already fragile financial system.