In a definitive move to bolster transparency and accountability within the nation’s financial sector, Bangladesh Bank has issued a comprehensive new directive. The central bank has imposed a stringent ban on its officers and staff participating in training programmes, seminars, symposiums, and workshops—both domestically and abroad—that are funded by commercial banks, financial institutions, or related entities. This regulatory measure is specifically designed to eliminate potential conflicts of interest and to uphold the integrity of the central bank’s supervisory role.
The official circular was disseminated on Wednesday, 13 May, under the signature of Mohammad Ataur Rahman Khan, the Additional Director of the central bank. The directive serves as a formal tightening of the code of conduct for central bank personnel, ensuring that their professional development and external engagements remain entirely independent of the institutions they are tasked with regulating.
Strict Prohibitions on Third-Party Funding
According to the guidelines outlined in the notification, no official or employee of Bangladesh Bank is permitted to attend any training or workshop, either as a trainee or an instructor, if the event is financed by a scheduled bank or a non-bank financial institution (NBFI). This prohibition applies to events organised within the country as well as those held internationally. The rationale behind this restriction is to prevent any form of financial or professional obligation that might arise from accepting hospitality or educational benefits from regulated entities.
Furthermore, the directive extends to organisations that provide goods or services to the central bank. Officials are strictly forbidden from participating in any extra-contractual training, seminars, or workshops abroad that are funded by these service providers or vendors. By implementing this rule, the central bank aims to ensure that procurement processes and service-level agreements remain untainted by the influence of corporate socialising or foreign junkets.
Regulations Regarding Domestic Engagements
While the ban on foreign travel and third-party funded training is absolute, the central bank has provided specific protocols for domestic intellectual contributions. Bangladesh Bank officials may still serve as speakers or trainers at seminars and discussion meetings organised within the country, provided they adhere to the following conditions:
Prior Authorisation: Explicit permission must be obtained from Human Resources Department-2 before accepting any such invitation.
Renunciation of Remuneration: Under no circumstances may the official accept any form of honorarium, fee, or financial reward from the host organisation.
Conflict of Interest Assessment: Participation is only permissible if the event does not interfere with the official’s duties or create a situation where the interests of the central bank could be compromised.
The directive emphasises that even in instances where participation is allowed, the primary objective must be the dissemination of knowledge or policy clarification, rather than personal gain or the cultivation of unofficial industry ties.
Enhancing Financial Sector Transparency
This policy intervention comes at a time when the central bank is under increasing scrutiny to demonstrate impartiality in its oversight of the banking sector. By prohibiting staff from travelling at the expense of commercial banks, Bangladesh Bank is moving to align its internal governance with international best practices for central banking. The practice of “sponsored travel” has long been viewed by governance experts as a risk factor that can lead to regulatory capture, where the supervisor becomes too closely aligned with the interests of the entities it monitors.
The central bank has clarified that this instruction has been issued with the approval of the competent authority and is effective immediately. All departments and branch offices of Bangladesh Bank have been notified to ensure strict compliance with these new regulations. The move is expected to significantly reduce the frequency of foreign tours undertaken by central bank officials that are not directly funded by the bank’s own budget or through official bilateral agreements with international bodies like the IMF or World Bank.
Through this mandate, Bangladesh Bank reaffirms its commitment to maintaining a professional distance from the market players it regulates, thereby fostering a more transparent and ethically grounded financial environment in the country. This update follows previous efforts to curb unnecessary expenditure and ensures that the central bank remains a neutral arbiter in the financial landscape.