Better regulations and efficient manpower conversant with latest technological know-how are deemed to be key requirements for the modern-day banking in the country to tackle emerging challenges.
The observations came Saturday from discussion panellists at a national seminar on the sector. Economists, journalists and bankers were on the panel.
They said only skilled manpower could handle the information technology (IT)-based banking properly, averting many sophisticated machinations.
They stressed the need for higher remunerations for engaging skilled and efficient human resources in the key financial sector.
The Association of Bankers, Bangladesh (ABB) organised the national seminar on 'Future Vision' in banking at Hotel Radisson in the city.
Shitangshu Kumar Sur Chowdhury, deputy governor of the Bangladesh Bank (BB), central bank of Bangladesh, presented keynote on the future banking in Bangladesh at the seminar.
Former BB deputy governor Khondkar Ibrahim Khaled was moderator at the function.
Editor of the Financial Express Moazzem Hossain, founder-managing director of Islami Bank Bangladesh M Azizul Huq and professor of Economics at Dhaka University Dr MA Taslim were panel discussants.
Prof Dr MA Taslim said banks are highly sensitive to the other sectors, and for this reason, there is need for better regulations to cope with the challenges.
Citing the role of banks in the great economic depression in the 1930s, he said: "If banks are affected, all sectors are affected. So they need better regulations to run."
The economics professor suggested that better regulations should be given top priority--no laxity in the sector ever be allowed.
He said IT is a complex tool and it needs to be carefully handled to avoid risks in the financial sector.
Professor Taslim said exit policy strategy for the inefficient manpower should be allowed for the survival of the banking sector.
Financial Express editor Moazzem Hossain said skilled manpower in the banking sector, especially in the central bank, is lacking.
"We've banks but we lack efficient manpower," he noted.
He said separate pay scale, especially in the central bank, is also necessary condition for boosting the skilled manpower required to combat the future challenges in the banking sector.
Mr. Moazzem said executing the objectives in respective future banking planned by the central bank would not be possible without skilled and efficient manpower.
He stressed properly manned banking by properly skilled personnel with integrity, particularly in respect of the central bank.
Founder-managing director of Islami Bank Bangladesh M Azizul Huq said the central bank should give some policy spaces for the Islamic banking to reach the optimal point.
He noted there has been a phenomenal growth of the Islamic banking in the country and it might grab 50 per cent share of total banking in terms of growth over the next 10-15 years. "This (Islamic banking) is people-acted, government-approved banking system and it should not be dealt with religious and political affairs," Mr Huq told the meet.
While presenting the keynote paper, Bangladesh Bank deputy governor Shitangshu Kumar Sur Chowdhury said the central bank is now planning introduction of dynamic provisioning to avoid future financial crisis.
Dynamic provisioning was introduced in Spain in 2000 and it proved to be useful in two dimensions: mitigating the build-up of risks and providing capacity of loss absorption to the banks.
The BB deputy governor said the central bank would continue promoting the strengthening of corporate governance in banks, promoting the risk-management function and improving the risk disclosure.
Also, the central bank will focus on risk-based supervision aimed at identifying systemic risks, in the banks in which risks are the greatest.
Mr Chowdhury divided his presentation into two key parts--future commercial banking and future central banking.
He said ensuring deployment of skilled human resources would emerge as key challenges for the commercial banks.
Bringing most of the unbaked population segments under banking services, adapting to global best practices and addressing corporate- governance concerns are also key challenges for the commercial banks in future.
He said commercial banks should have introduced forward, hedge and derivative banking to meet demand for the future banking needs.
While concluding the session, Khondkar Ibrahim Khaled said IT is dependent on the human beings operating it and their skills are urgently required to handle the new technology properly.
He cited an instance. "BASIC Bank is automated but its corrupt and inefficient people damaged the bank."
The noted banker said spread between the lending and the deposit rates remained high in the country following monopolistic attitude of the owners of the banks.
He said the government might consider imposing taxes on the owners of the banks that maintain higher spread. Mr Khaled suggested that commercial banks should create new entrepreneurs for diversifying their loan portfolio.
If banks failed to create new entrepreneurs to provide credits, then they would be at a stake, he warned about the traditional banking practice in the country.
Jasimharoon@yahoo.com
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