BB must ensure compliance of regulatory measures by commercial banks

Workshop on Importance of Compliance in Trade Finance

FE Desk | Published: October 08, 2018 23:49:29

President of International Chamber of Commerce-Bangladesh (ICC-B) Mahbubur Rahman has said Bangladesh Bank must ensure compliance of regulatory measures by the commercial banks.
"So far only limited action has been taken to penalise defaulters, improve risk management and strengthen professionalism in bank management. To tackle the sector's deep-rooted problems of corruption and poor risk practices further efforts are needed," the ICC-B chief said while addressing the closing ceremony of a two-day workshop on Importance of Compliance in Trade Finance at a city hotel on Sunday.
He said huge amount of Non-Performing Loans (NPL) is affecting the eight state-owned commercial and specialized banks.
For decades, state-owned banks have been the prime leader to the large corporate borrowers particularly in the industrial sector of the economy, Mr. Rahman mentioned.
Since 2009, the government has injected Tk 145.05 billion into the state owned banks but they are yet to show any sign of strengthening their capital base.
On top of this, total banking sector loan amounted to Tk 7,527.30 billion, of which Tk 803.07 billion or 10.67 per cent was bad debt. And if restructured or rescheduled loans were included, NPL in the banking sector would be 17 per cent of total outstanding loans, he added.
Banks are required to keep at least 11.81 per cent capital adequacy ratio (CAR) which determines the adequacy of banks' capital keeping in their risk exposures.
But as of June, banks' CAR stood at 10 per cent, down from 10.11 per cent a quarter earlier.
ICC Bangladesh Banking Commission Chairman & CEO, Bangladesh International Arbitration Centre (BIAC) Mr. Muhammad A. (Rumee) Ali, in his address said the non-compliance in trade financing risk is impacting Bangladesh's overall risk rating.
In fact, in Bangladesh it raises the cost of accessing trade finance product in international market.
"Training like this, therefore will increase the efficiency of the concerned bank officials," he added.
Mr. Helal Ahmed Chowdhury, Supernumerary Professor, BIBM & Former Managing Director, Pubali Bank Ltd thanked ICC Bangladesh for arranging such workshops continuously for the bankers both at home and abroad.
Such programme allows the bankers to interact with their colleagues and learn from the experienced speakers on various issues related to banking operations, in particular international trade finance.
He opined that all the banks including the Bangladesh Bank should have appropriate yearly allocations for training their officials so that they can attend such workshop/training of international standard. He said risk management and compliance are more important in the financial industry than ever before.
ICC Bangladesh Secretary General Ataur Rahman also spoke on the occasion.
Sudhakar Sanjeevi, Senior Officer, Internal Control Department, Rakbank, UAE conducted the workshop.
A total of 103 participants from 30 banks attended the workshop.