Under fire over $81 million heist, Atiur Rahman quits Bangladesh Bank as governor

Atiur Rahman has stepped down as Bangladesh Bank governor after days of calls for his head for concealing even from the government the news of $81 million funds being stolen from the bank’s reserves.

Atiur is the first governor in Bangladesh’s history to resign in such a way only a few months before his tenure was to end.

Former finance secretary Fazle Kabir has been named Atiur’s successor.

After an angry Finance Minister AMA Muhith announced to bring changes to the country’s banking sector, Atiur told reporters on Tuesday morning that he would resign only if Prime Minister Sheikh Hasina asked him to.

But after meeting the prime minister, he said he handed in the resignation letter “voluntarily out of a sense of moral responsibility”.

Following his resignation, the government sacked his deputies Md Abul Quasem and Nazneen Sultana, and Bank and Financial Institutions Division Secretary M Aslam Alam, who was an ex officio member of the central bank’s Board of Directors.

Later, the Bangladesh Bank filed a case with Motijheel police over the theft that took place around one and a half months ago.

The finance ministry has also formed a committee headed by former governor Mohammed Farashuddin to investigate the heist by hackers.

Muhith was upset with Atiur for not informing him right away about the theft of $81 million of Bangladesh’s foreign exchange reserves kept with the Federal Reserve Bank of New York.

The finance minister also disapproved of Atiur's visit to India at this juncture.

The pressure on Atiur grew when senior Awami League leader Nooh Ul Alam Lenin demanded his resignation on Monday. The BNP has been pressing for the same demand for several days.

Atiur Rahman addresses a press conference at his residence after resigning from the post of Bangladesh Bank Governor on Tuesday. Photo: nayan kumar

Defending his trip to India, he said: “I went to India at the invitation of Indian Finance Minister Arun Jaitley and IMF chief Christine Lagarde. I am a member of two panels.”

He said the heist had been discussed there too. “I was away for two days and two days were holidays. I was constantly working online while I was there.”

"So, it (his absence) need not have been made into a big issue,” said Atiur.

About the delay in informing the finance ministry about the heist, he said he was trying to figure things out after the cyber attack.

“We were trying to understand what had happened. I brought an expert from abroad, called in RAB, NSI, and all of them tried to locate where it happened.

“Meanwhile, I had to be on high alert to ensure the remaining money wasn’t touched. I also tried to retrieve the sum that had been taken out. It took us a bit of time to do all that.”

Recalling the prime minister's cooperation in helping him fulfil his responsibilities, he said: “I won’t say I have been entirely successful. But I tried to create a new trend in the running of the central bank. Today, the world treats the Bangladesh central bank as a model.”

About his parting meeting with the prime minister, Atiur said: “She was very upset. There were tears in her eyes. But she accepted my resignation.”

He quoted Hasina as saying that he had set an “example by volunteering to resign” and had proved himself to be a “brave person”.

The former Dhaka University teacher said he would go back to teaching and hoped to succeed in that role.

He was appointed the governor in May, 2008, after the Awami League came to power.

The government extended his tenure by another four years when the first contract ended in 2012. His second term was to end in August.

Atiur was hailed for the swelling of the foreign exchange reserves and his efforts to extend banking services to marginal people.

He also received several awards as the governor.

He went to the Philippines to receive the ‘GUSI Peace Prize International 2014’ Award for his work in economics with a focus on the welfare of the poor.

The Gusi Peace Prize foundation described him as the “Poor Man’s Economist” in the award citation.

London-based The Financial Times-owned magazine The Banker announced him the ‘Central Banker of the Year 2015’ in the Asia-Pacific region.

Rahman did his PhD in economics at the University of London. He is a former development researcher and a professor of development studies at the Dhaka University.

Before becoming Bangladesh's top banker, he served as the director of Sonali Bank and chairman of Janata Bank.

Rahman has written many research articles on Bangladesh’s economic development and microcredit. Until 2009, he penned 45 books.