The recent change in the position of Bangladesh Bank governor has sparked much debate across the country.
Many expected Dr Ahsan H Mansur to complete his full term, till August 2028.
That was wishful thinking as political governments typically appoint their own people to lead ministries, departments and institutions, a common practice worldwide.
Some argue that the central bank governor’s role is highly specialised and technical, and given the organisation’s importance, it should stay above politics.
Moreover, no government should be able to remove a governor before their term ends.
We have seen how Jerome Powell, despite attempts by the US president, could not be removed because the chair of the Federal Reserve is protected by law.
However, in Bangladesh, where institutions are fragile and governance often relies on expediency rather than norms and due process, this expectation is unrealistic.
In such an environment, power frequently bypasses rules and proper procedures are replaced by political motives.
Yet, adhering to established norms is crucial here as institutions need stability and respect that only proper procedure can provide.
While a change in the central bank leadership might be anticipated, how it is managed reveals the resilience and maturity of our institutions.
The governor’s role goes beyond mere employment.
It embodies reliability and public trust in the financial system.
If this transition was inevitable, it could have been handled with more finesse.
Announcing the removal through the media and the suddenness of the exit diminish both the individual’s and the institution’s dignity.
Despite any policy disagreements, the governor who led the central bank during challenging times deserved formal communication and a respectful farewell.
The appointment of the new governor, announced on the same day, has also generated curiosity as well as criticism, with his qualifications, profession and party affiliation being discussed publicly.
This, again, is an exclusive issue for the government as such appointments are not made through a structured recruitment process.
The process of selecting a central bank governor varies across countries.
But in most established democracies, it is designed to balance professional competence, institutional independence, and democratic accountability.
Professional credibility and macroeconomic expertise are key criteria for the appointment.
While the executive branch usually plays a central role in appointments, safeguards are often built in to prevent arbitrary removal and to protect the institution’s autonomy.
In many advanced and emerging economies, three common features are observed in the appointment of a central bank governor.
First, the appointment is formalised through legal procedures rather than informal political decisions.
Second, fixed terms are provided to protect policy continuity.
Third, removal before the end of term is either legally restricted or politically costly.
In some countries, parliamentary hearings or legislative confirmations add an additional layer of transparency.
The underlying principle is clear.
While central banks are accountable to the state, they must be insulated from day-to-day political interference.
Monetary policy decisions, such as setting interest rates, managing liquidity, or supervising banks, require technical judgement and long-term vision.
If governors can be appointed or dismissed abruptly without due process, markets may question the institution’s credibility.
The eruption of mob violence at the Bangladesh Bank premises prior to the transition is deeply troubling.
A central bank is not merely an administrative office.
It is a symbol of monetary sovereignty and financial discipline.
When groups can exert pressure through such physical presence, it....
