In a decisive move to modernise Bangladesh’s financial ecosystem, Dr Ahsan H. Mansur, the Governor of the Bangladesh Bank, has called upon the insurance industry to transition rapidly toward cashless transactions. Speaking as the chief guest at the unveiling of the Insurance Development and Regulatory Authority’s (IDRA) new website and Digital Insurance Manual, the Governor emphasised that digitisation is no longer optional but a prerequisite for national economic growth.
A Shift Toward Transparency
The Governor revealed that the IDRA is currently drafting comprehensive guidelines to facilitate this digital migration. Under the proposed framework, all premium collections must be processed through banking channels, effectively eliminating the risks associated with physical cash handling.
Reflecting on the industry’s historical challenges, Dr Mansur offered a candid critique: “In the pursuit of short-term gains, we have lost our way. Our objective now is to transform insurance into a truly productive sector.” He warned that failing to implement robust governance would stifle the industry’s potential, noting that the central bank stands ready to provide the necessary technical and structural support.
Enhancing Fiscal Revenue and Governance
A primary driver behind this digital push is the potential for increased tax transparency. By reducing cash dependency, the government anticipates a significant rise in revenue. The Governor stressed that insurers must proactively provide data to the regulator via the new portal; otherwise, the benefits of digitisation will remain out of reach.
“Accountability is paramount,” Dr Mansur asserted, highlighting a recurring grievance in the sector: the failure to settle customer claims due to fund mismanagement. He insisted that investment portfolios and premium funds must be managed with professional integrity to ensure liquidity for payouts.
Key Stakeholders and Reform Goals
| Stakeholder | Primary Objective |
| Bangladesh Bank | Integrate insurance with the banking sector for cashless premiums. |
| IDRA | Implement legal, digital, and institutional reforms via the new manual. |
| Insurance Companies | Transition from “short-term profit” models to long-term productivity. |
| Policyholders | Benefit from timely claim settlements and transparent digital tracking. |
The Road to GDP Expansion
Currently, the insurance penetration rate in Bangladesh remains modest compared to regional peers. The Governor noted that while the government can initiate reforms, market forces must drive product innovation. Whether covering movable assets or fixed property, the expansion of the insurance market is intrinsically linked to the growth of the national Gross Domestic Product (GDP).
Echoing this sentiment, IDRA Chairman M. Aslam Alam stated that the new Digital Insurance Manual is a cornerstone of institutional reform. He predicted that if these digital strategies are executed effectively, the sector will see a transformative leap within the next five years. Conversely, he warned that stagnation would only cause existing systemic issues to “condense and complicate.”
Industry leaders, including B.M. Yusuf Ali, President of the Bangladesh Insurance Forum (BIF), welcomed the initiative but reminded the Governor that many firms have significant funds tied up in the banking system. He requested central bank assistance to ensure these funds remain accessible, preventing any liquidity-driven failures in claim settlements.