A candid admission comes from the finance minister that many well-established companies are facing acute capital shortages, in a crunch he attributes to lack of "fair competition" and governance gaps.
"Many big companies and banks are in serious capital shortage," Finance and Planning Minister Amir Khosru Mahmud Chowdhury said Wednesday while speaking as chief guest at the inaugural session of the first-ever Financial Accounting and Reporting (FAR) Summit held at a city hotel.
The summit was jointly organised by the Financial Reporting Council (FRC), the Institute of Chartered Accountants of Bangladesh (ICAB) and the Institute of Cost and Management Accountants of Bangladesh (ICMAB).
Turning to the predicament of banking sector, the finance minister said the current financial strain reflected deeper structural weaknesses, including distorted lending practices within banks.
"Depositors keep money in banks, and loan approvals were often influenced by board-level decisions," he points out, adding that auditors should adopt stronger "self-regulation" to ensure transparency.
He stresses full transparency and accountability for restoring investor confidence and achieving long-term economic stability in the country.
"Bangladesh is now at a crossroads and all depend on the institutions," the finance minister implicitly reminds about the transition following political upheavals.
Mr. Chowdhury notes that the Financial Reporting Council would continue to exist but should focus on supervision and monitoring rather than direct enforcement alone.
"Every day, fund managers are contacting us-from Hong Kong, London, even JPMorgan. But if foreign investors see that our accounting is not up to international standards, they will be discouraged," he told the meet.
The minister also recalls delegating authority for issuing export-utilisation certificates to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) during his tenure as commerce minister in a previous BNP government, and says the move had improved governance after earlier allegations of corruption at the Export Promotion Bureau.
He strongly feels that Bangladesh needs a financial system built on institutional integrity.
"The current government wants a system of complete transparency and accountability."
The new custodian of exchequer alerts that Bangladesh's economic future depends on institutions such as FRC, ICAB and ICMAB. "No regulator can identify every mistake daily. Accountants and professional bodies must take the lead in self-regulation."
Mentioning that institutions have weakened over time due to past "governance failures", the minister alleges that financial irregularities and bank fund diversions were often linked to misleading accounts.
"Many companies listed on the capital market used false information. Investors were misled," he deplores.
Prime Minister's Finance and Planning Adviser Prof Rashed Al Mahmud Titumir, speaking as special guest, said weak auditing practices had contributed to financial-sector instability. "In many cases, audit firms have become their own judges," he said through online platform, adding that regulatory gaps had deepened banking-sector vulnerabilities.
He says investors had suffered significant losses due to misleading financial statements, while banks had extended large loans based on inaccurate reports that later turned into defaults.
BGMEA President Mahmud Hasan Khan told the meet that out of 7,200 registered member-organisations only around 2,500 were now active, largely due to poor accounting practices.
"Inflated accounts can destroy organisations," he notes, adding that discrepancies between assets and liabilities were a common concern in the sector.
He also warns that lack of transparent accounting discouraged foreign buyers and reduced competitiveness in export markets. Chairman of FRC Md Sajjad Hossain Bhuiyan presented the keynote paper, titled 'Reliable Financial Reporting: Where Does It Really Matter?'
Finance Secretary Dr Khairuzzaman Mozumder chaired the inaugural session. ICAB acting president Rokunuzzaman and ICMAB president Kauser Alam also spoke at the event.
The summit featured two technical sessions attended by CFOs, auditors and policymakers from leading institutions.
jasimharoon@yahoo.com
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