Dr. Fakhruddin Ahmed Former Governor, Bangladesh Bank
Fakhruddin Ahmed served as the 8th Governor of Bangladesh Bank, from November 29,2001, to April 30, 2005.An accomplished economist and civil servant, he has left an indelible mark on Bangladesh's financial and governmental landscape.
Dr. Ahmed had a remarkable career that spannedacademia, civil service, and international organizations.
His academic career started as a Lecturer in the Economics Department at the University of Dhaka in January 1962.Subsequently, in October 1963, Dr. Ahmed joined the erstwhile Civil Service of Pakistan and performed several crucial roles between 1963 and 1978, including as an Assistant Commissioner, Sylhet; Subdivisional Officer in Moulvi Bazar;Additional Deputy Commissioner, Mymensingh; Deputy Secretary, the Services and General Administration Department and Deputy Secretary to the East Pakistan Cabinet; and Joint Secretary to the Economic Relations Department, Government of Bangladesh. In this last capacity, Dr. Ahmed led Bangladesh Government teams in negotiating assistance from the Asian Development Bank, USAID, and West European countries.
Dr. Ahmed's international career at the World Bank began in November 1978 in the South Asia Region, overseeing nations like Sri Lanka and the Maldives. In over two decades at the World Bank, he worked on a number of regions including East Asia, East Africa, and South Asia, including a five-year stint in the Bank’s Resident Mission in Nairobi, Kenya. In his long career with the World Bank, his responsibilities included preparation and management of Country Assistanceprogrammes, as well as programmes in the agriculture, rural development, and the environment sectors. Dr. Ahmed’s responsibilities also included quality assurance of the World Bank supported programmes.
Shortly after retiring from the World Bank, he was appointed as the 8th Governor of Bangladesh Bank, where he served from 2001 to 2005. During his tenure, Dr. Ahmed implemented a floating exchange rate system that was introduced with minimalvolatility, accompanied by interest rate flexibility that led to increased industrial investment. Additionally, pioneering corporate governance measures were introduced within the Bangladeshi corporate and financial sectors. At his initiative, laws were amended restricting membership in the Boards of Directors of banks from the same family to two, limiting membership to two terms (six years), doing away with the position of sponsor directors with permanent positions on the Boards, and introducing independent directors. Bangladesh Bank issued Core Risk Management Guidelines on five major risk areas—credit risk, foreign exchange risk, asset-liability risk, internal control and compliance, and money laundering—all aimed at promoting better governance in and improved services by the banks.Stringent loan rescheduling guidelines were introduced to stop evergreening of loans. Strengthening the corporate governance and strict enforcement of the loan scheduling guidelines led to a significant reduction in non-performing bank loans between 2001 and 2005.
Dr. Ahmed’s tenure as Governor also saw significant institutional strengthening of Bangladesh Bank. For example, Bangladesh Bank Order, the law defining and regulating the functions of Bangladesh Bank, was amended to increase the Bank’s autonomy. He also drove the implementation of a majorprogramme to strengthen the capacity of Bangladesh Bank,such as by focusing on the initial computerization of the Bank’s operations and business processes. Furthermore, the research and policy analysis capacity of Bangladesh Bank was strengthened.
After finishing his tenure as Governor. Dr. Ahmed moved from the macro to the microfinance sector. He was invited by the Board of Palli Karma Sahayak Foundation (PKSF), an apex financing body with goals of promoting rural employment and reducing poverty, to become its Chief Executive. Under his leadership, PKSF, working through more than 200 microcredit organizations, expanded its lending to new areas such as loans for seasonal crops, fisheries, and small-scale industries. Good corporate governance practices were introduced in NGOs receiving loans from PKSF, as a continuing theme to Dr. Ahmed’s work throughout his career.
Dr. Ahmed provided exceptional leadership while heading the Bangladesh Non-Party Caretaker Government from 2007 to 2009, leading up to the momentous 9th parliamentary election, playing a crucial role in strengthening democracy in Bangladesh.In preparation for a free, fair, credible, and inclusive election, a new voters list with photographs was prepared, and transparent ballot boxes were used for the first time. Institutions like the Election Commission and the Anti-Corruption Commission were strengthened. Registration of political parties by the Election Commission and annual audits of their accounts was made mandatory. New electoral rules and guidelines were introduced, such as requiring candidates todeclare assets and income, educational qualifications and criminal records (if any). The Judiciary was separated from the Executive Branch. New institutions such as the National Human Rights Commission, Information Commission, and Consumer Rights Commission were set up under newly-enacted laws. Dr. Ahmed’s tenure culminated in the 9th parliamentary elections, which had a voter turnout of more than 85% and saw the Awami League win a landslide majority of seats and the election of Sheikh Hasina as the nation’s Prime Minister.
Born on 1 May1940, in Rob Nagarkandi, Munshiganj District, British India (now Bangladesh), Fakhruddin Ahmed is married, and the proud father of two sons. His academic journey began with Matriculation from Mathbaria High School, Pirojpur, in 1955, and proceeded to Intermediate in Dhaka College in 1957. He achieved his BA (Honours) and MA in Economics at the University of Dhaka in 1960 and 1961, securing a 1st Class 1st Position in both degrees. In 1971, he earned an MA in Development Economics from Williams College, Massachusetts, USA. Subsequently, in 1975, Dr. Ahmedearned a Ph.D. from Princeton University, USA, working on a general equilibrium mathematical model for his doctoral thesis entitled "Migration and Employment in a Multi-Sector Model: anApplication to Bangladesh."