Beximco Group has been unable to pay its workers’ wages for several months, with the government stepping in to cover salaries and benefits. Now, a receiver has been appointed to help revive the company.
Dr. Ahsan H. Mansur, the Governor of Bangladesh Bank, shared these updates during a seminar on November 11 at the Third Bangladesh Economic Conference titled “Inequality, Financial Crimes, and the Healing of Bangladesh’s Economy,” organized by Banik Barta at Pan Pacific Sonargaon Hotel in Dhaka.
Dr. Mansur explained that the appointment of a receiver for Beximco does not mean the company is being shut down. Instead, it is part of efforts to bring the company back to life. He emphasized that while the government has been covering the wages for Beximco’s workers for the past few months, the goal is to keep the company operational and ensure its export revenue is not lost. The aim is to prevent the company from going under and ensure that the country’s money remains within the economy.
Addressing the state of Bangladesh’s banking sector, Dr. Mansur acknowledged that it has been the hardest-hit part of the economy. However, he clarified that solving these issues quickly would not be possible. He pointed out that the banking sector was in a fragile state and that rapid reforms would require more time. “If we want quick solutions, I’ll have to resign,” he said, referring to the complex financial challenges. He assured, however, that no banks would be closed, and liquidity support would be provided to struggling banks.
Dr. Mansur also touched on concerns about financial crime, saying that large sums of money had been illicitly siphoned out of the country, which would be difficult to recover. However, he confirmed that efforts to trace and bring back the money were already underway. Representatives from the U.S., the U.K., the World Bank, and Singapore would soon be meeting with Bangladesh officials to assist in these efforts.
On the topic of businesses closing down, Dr. Mansur emphasized that the government does not want any company or industry to shut down due to the impact it has on employment. He assured that no company’s accounts would be seized, adding that efforts were being made to bring banking services to rural areas.
Despite some banks struggling with liquidity and being unable to pay out cash to customers, Dr. Mansur stated that the Bangladesh Bank had not printed additional money in the past three months. He explained that maintaining macroeconomic stability is crucial for future investment, and the government is taking steps to stabilize the economy. Business owners were urged to be patient and assured that they would receive the support they needed.
Dr. Mansur also reassured the public that Bangladesh would not face a famine. The country is not in a recession like Sri Lanka, he said, and growth had not turned negative. He acknowledged the challenge of controlling inflation but noted that it takes at least a year for any country to reduce inflation significantly. The government has already taken measures to open letters of credit for essential goods and relax import duties.
Regarding foreign exchange, Dr. Mansur said that there was no longer a shortage, as necessary measures had been taken on the supply side. He also mentioned that a new Banking Resolution Act was being planned to address challenges in the financial sector. However, he warned that it would take 2-3 years to fully stabilize Bangladesh’s banking system, which is currently weaker than Pakistan’s.