Published: 11:35 PM, 06 September 2026
Financial Regulators Must Be Allowed to Work Rising Above Fears or Favours
Jamal Uddin Sarker
A strong and independent financial regulatory system is essential for the stability of any modern economy. For Bangladesh, where the banking and financial sectors play a crucial role in economic development, the effectiveness of financial regulators is particularly important. Regulators must be allowed to perform their duties without fear, political pressure, personal influence or nepotism. Unless regulatory institutions can act independently and impartially, efforts to ensure discipline and accountability in the financial sector will remain incomplete.
Financial regulators are responsible for protecting depositors, investors and the wider economy. They monitor banks and financial institutions, enforce laws, prevent irregularities and take action against institutions that violate regulations. When regulators fail to act firmly, financial misconduct can grow unchecked. Weak supervision can encourage loan irregularities, money laundering, market manipulation, mismanagement and other forms of financial abuse.
Bangladesh has witnessed various challenges in its banking and financial sectors over the years. Cases of large loan defaults, financial scams, irregular lending and corporate mismanagement have raised serious questions about the effectiveness of regulatory oversight. Such incidents do not merely affect individual banks or companies. They undermine public confidence in the entire financial system and ultimately place pressure on the national economy.
One of the major reasons behind regulatory weakness can be a lack of institutional independence. A regulator may have sufficient legal authority on paper, but that authority becomes meaningless if officials hesitate to take action against influential individuals or institutions. Regulatory decisions should be based on evidence, law and professional judgment—not on political connections, personal relationships or fear of powerful groups.
The principle should be simple: the law must be applied equally to everyone. A small borrower should not face strict action while a powerful defaulter receives repeated opportunities to avoid responsibility. Similarly, a small financial institution should not be punished severely for violations while a large or politically influential institution escapes meaningful scrutiny. Such double standards damage the credibility of regulators.
Financial regulators also need adequate resources and skilled personnel. Modern financial crimes are becoming increasingly sophisticated, involving complex transactions, digital platforms, international transfers and advanced technologies. Regulators therefore require trained professionals, modern information systems, data-analysis capabilities and sufficient budgets. Without these facilities, even honest and determined officials may struggle to detect irregularities in time.
Transparency is another important requirement. Regulatory decisions should be clearly explained, properly documented and subject to appropriate institutional review. At the same time, regulators must remain accountable for their own actions. Independence should never mean freedom from scrutiny. Rather, it should mean freedom to make professional decisions while remaining accountable to the law, Parliament, the courts and the public.
The recruitment and appointment of senior regulatory officials should also be based primarily on competence, integrity and professional experience. Political affiliation or personal connections should not determine who occupies important regulatory positions. A regulator who believes that his or her position depends on pleasing powerful interests cannot be expected to act fearlessly. It must be noted that Bangladesh has turned out to be the country with the highest sum of defaulted loans in the world in a recent survey.
There is also a need for stronger coordination among different regulatory bodies. Banking, capital markets, insurance, taxation, company affairs and law-enforcement agencies often deal with interconnected financial activities. Better information sharing and coordinated investigations can help regulators identify risks before they become major crises.
The government has an important role in creating an environment where regulators can work independently. Political leaders should respect regulatory decisions and allow institutions to enforce laws without interference. At the same time, regulators must demonstrate professionalism, integrity and consistency. Independence must be matched by responsibility.
A healthy financial sector is not built simply by creating more rules. It depends on whether those rules are enforced fairly and consistently. If people believe that money, influence or political connections can protect wrongdoers, confidence in financial institutions will decline. On the other hand, firm and impartial regulation can encourage responsible behaviour, protect honest businesses and strengthen investor confidence.
Bangladesh needs a financial regulatory system that is fearless, professional and above personal or political favour. Regulators must be empowered to act against wrongdoing regardless of who is involved. Only then can financial discipline be established and public confidence restored. The message should be clear: financial regulators must be allowed to work rising above fears or favours, because the stability of the economy and the trust of the people depend on it.
Jamal Uddin Sarker is an ICT
trainer and a columnist.
