BB favours appointment of banking sector Ombudsman

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Nazmul Ahsan
The central bank has suggested the government to appoint an Ombudsman for the banking sector to help address irregularities and frauds in the sector, official sources said.
India and Pakistan have banking sector ombudsmen.
A banking ombudsman, if appointed, would help protect the interests of both depositors and borrowers and resolve inter-bank conflicts, the BB in its recommendations said.
The Bangladesh Bank sent its suggestions to the Ministry of Finance (MoF) Tuesday last as the latter had sought opinion of the former on the issue.
Earlier, the Parliamentary Standing Committee on MoF recommended for appointment of a banking sector Ombudsman, sources said.
'The BB believes that appointment of an ombudsman would help ensure good governance in the banking sector by addressing the inter bank conflicts and safeguarding the interests of both bank borrowers and depositors,' reads the suggestion of BB.
'Bank Ombudsman may be appointed in Bangladesh to remove banking irregularities and frauds.'
'The activities of Bank Ombudsman in India and Pakistan may be consulted in this regard.'
The BB in its suggestion said the government has to amend the Bank Company Act, 1991 to accommodate the provision for appointing a Bank Ombudsman.
Citing about the BO of India, the BB said that India appointed BO under the Banking Ombudsman Scheme, 2006 and Chief General Manager or General Manager of the Reserve Bank of India becomes the BO in India.
The officials of Reserve Bank of India are appointed in the separate office of BO. The office of BO in India deals with irregularities like fake bank cheque, late payment or failure of remittance by banks, harassment by banks in providing loans or non-compliance with interest rate fixation, the BB said in its written suggestion.
The BO undertakes effort to address the irregularities through different ways including signing of memorandum of understanding between accused and accuser.
As far as the role of BO in Pakistan, the BB said the post is called in Pakistan as 'Banking Mohtasib', who is appointed by the President of Pakistan in accordance with the advice given by the State Bank of Pakistan.
When asked, officials in the MoF said the concept of Bank Ombudsman in the country is new, which needs more consultation with the members of the Parliamentary Standing Committee on MOF and the BB.
The suggestion of the BB in appointing the Bank Ombudsman may be sent to the Ministry of Law for vetting prior to sending the same to the cabinet meeting for policy decision.