In a major move to restore discipline in the financial sector, Bangladesh Bank (BB) Governor Ahsan H. Mansur announced on Thursday that the central bank is planning to introduce a “Mortgage Property Depository” system.
The initiative aims to prevent the common fraudulent practice of using the same collateral to secure loans from multiple banks—a loophole that has long plagued the country’s banking industry.
Verifying Collateral in Real-Time
Speaking at a press conference on January 29, Governor Mansur explained that the new system will be mandatory for loans exceeding Tk 50 crore. Under this framework, banks will be able to easily verify whether a property is already mortgaged elsewhere before approving a loan.
“One mortgage cannot be shown to five different banks,” the Governor stated firmly. “If a property is already pledged, it must be disclosed. All collateral information must be recorded in a central registry.”
The Governor also highlighted that once a bank accepts a property as collateral, Bangladesh Bank will conduct independent third-party valuations to ensure the assessed value of the asset is accurate. While he acknowledged that implementing this for large-scale loans may take time, he emphasized that it is a critical step toward fixing structural weaknesses in the credit system.
Independence Amidst Election Season
Addressing concerns regarding the upcoming elections, Dr. Mansur asserted that central bank operations should remain insulated from political shifts. He noted that as a service-oriented institution for the public, there is no room for government interference in its regulatory duties.
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Unprecedented Reforms: Mansur claimed that the volume of reforms and circulars issued by the central bank in the past year has surpassed the combined efforts of the last two decades.
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Market Stability: He pointed to improvements in the foreign exchange and forward markets, adding that the bank is now prioritizing the development of the capital account.
Leadership Transition at Sammilito Islami Bank
Regarding the appointment of a Managing Director (MD) for Sammilito Islami Bank, the Governor confirmed that the interview process has been completed. The relevant files have been forwarded to the Ministry of Finance for final approval.
The bank is currently under the direct control of the central bank. Dr. Mansur explained that during a “resolution” phase, the original board or owners lose authority, and the regulator takes over all responsibilities. However, he stressed the urgency of appointing a permanent MD to ensure the bank’s stable management.
