Bangladesh’s financial sector has failed to meet expectations, despite notable growth in the wider economy, primarily due to prolonged governance failures, weak regulatory enforcement, and delayed reforms. This was the key message delivered by Bangladesh Bank Governor Ahsan H Mansur during his speech at the Mastercard Excellence Awards 2025 in Dhaka today.
While the broader economy has shown impressive growth, the governor described the performance of the financial sector as “disappointingly behind”. He attributed this to unresolved structural weaknesses and a lack of meaningful reform. Despite the presence of institutional regulation, the governor pointed out that “irregularities persist underneath”, caused by lax enforcement of regulations.
“The financial sector in Bangladesh, although appearing to be regulated, faces significant challenges in practice. While regulations are strict, the mechanisms for compliance are not effectively enforced, allowing many irregularities to go unchecked,” Mansur stated. He also likened the situation to the local saying “hard on the outside, soft inside”, which describes a disconnect between regulatory norms and operational realities.
Mansur further stressed that despite Bangladesh’s economy now being comparable in size to Singapore’s, the financial sector remains “narrow” and unable to fully capitalise on the country’s economic size due to systemic issues like corruption, misallocation of assets, and regulatory failures.
In terms of recent positive steps, the governor acknowledged actions by Bangladesh Bank to simplify processes for credit card issuance by removing tax return and TIN number requirements. Additionally, reforms have allowed customers to purchase international airline tickets with credit cards without it being counted as part of their annual foreign exchange quota. While these are positive changes, Mansur emphasized that more substantial reforms are needed to truly strengthen financial governance and reduce systemic inefficiencies.
Gautam Agarwal, President of Mastercard South Asia, highlighted that Bangladesh’s financial transformation is underway, despite ongoing barriers. He pointed out that the country now has nearly 150 million active mobile financial service accounts, internet penetration is between 70-74%, and annual remittance inflows stand at around $2.5 to $2.6 billion.
However, Agarwal noted that around 80% of transactions are still made in cash, which he identified as a major obstacle to digitalisation. “India underwent a similar transformation. Just over a decade ago, only 2-5% of transactions were digital; today, that figure is 30-35%. Bangladesh is poised for a similar transformation,” he said.
At the awards ceremony, Mutual Trust Bank and Eastern Bank emerged as the biggest winners, each securing four awards. Other notable winners included City Bank, Islami Bank Bangladesh, United Commercial Bank, and BRAC Bank, each with three awards.
Mastercard has been operating in Bangladesh for 13 years and has consistently focused on financial inclusion and digital services. Syed Mohammad Kamal, Mastercard Bangladesh’s Country Manager, mentioned that the company has launched 30 new products in the last 12 months and is now fully managed by local professionals.