Requests for new banking licences must be turned down bravely: Salehuddin

Former finance adviser in the interim government Salehuddin Ahmed today (11 April) said authorities must be prepared to bravely reject requests for new banking licenses to protect the stability of the financial sector.

Speaking at the "Risk Conference on Banking & Finance 2026," organised by dFin and Dnet in Gulshan, Salehuddin shared his experience as a former central bank governor, noting that he frequently received proposals for new bank licences but managed them with technical caution.

He stressed that the current state of the industry, where depositors are struggling to withdraw their funds from distressed banks, underscores the necessity of saying "no" to such requests.

The former adviser highlighted the importance of financial inclusion and the role of technology-based solutions for those aiming to contribute to the economy.

He warned against the risks of seeking high interest rates in weak banks, noting that many such institutions have now been merged.

"Compliance is very important in the banking sector, and it has to be strictly followed in the financial sector," he said, adding that if the economy weakens, it negatively impacts all financial segments.

He also addressed the insurance sector, which he noted is often perceived as fraudulent despite its critical importance to the overall financial ecosystem.

To mitigate financial risks, Salehuddin urged bankers to assess the financial literacy of customers before granting loans.

He added that the proper implementation of robust risk management policies is essential for the sustainable health of the industry.