Digital banking involves fraud, cyber theft risks

Opine speakers at a conference, stressing stronger preparation before issuing licences for the new-model banks

FE REPORT | Published: April 11, 2026 23:31:05 | Updated: April 11, 2026 23:37:39

The country needs stronger preparation before issuing licences for digital banks, as the model carries risks including fraud and cyber theft, speakers observed at a conference in Dhaka on Saturday.
The central bank twice attempted to issue licences for digital banks in the past, but both efforts stalled.
Digital banks operate with minimal physical presence, offering deposits, withdrawals and other services through paperless platforms.
Participants, mostly banking industry people, also called for greater transparency, suggesting that credit information data be made more accessible so depositors can better understand how their funds are utilised.
Some stressed the need to improve financial literacy among board members of banks.
They also stressed the importance of changing mindsets across the banking sector to build a more resilient and risk-aware financial system.
They were addressing the day-long "Risk Conference on Banking and Finance 2026" organised by dFin and Dnet in collaboration with City Bank and NRBC Bank at a hotel in Gulshan.
Dr. Salehuddin Ahmed, former finance adviser to the interim government, attended the inaugural session as the chief guest.
Dr Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue or CPD, and Dr Toufic Ahmed Choudhury, former director general of the BIBM (Bangladesh Institute of Bank Management), also spoke.
Dr. Salehuddin Ahmed, who once served as governor of Bangladesh Bank, said that contingent liabilities associated with the  state-owned institutions have risen to more than Tk5.0 trillion, posing a significant fiscal risk.
He added these liabilities-largely government guarantees extended to public entities for procuring goods and services-could become a burden if called.
"If these guarantees are invoked, it will be very risky for the government, as repayment capacity remains uncertain," he said.
Contingent liabilities typically do not appear in headline fiscal deficit figures, but economists caution that their crystallisation can strain public finances, particularly amid ongoing domestic and external economic pressures.
He also raised concerns about the slow pace of reform at the National Board of Revenue.
"Progress in automation and computerisation remains limited," he said, noting that systems such as ASYCUDA have not been fully implemented due to inadequate digital infrastructure.
"The level of development in terms of NBR computerisation is still minimal," he said.
"Popular demands cannot be executed, but we must avoid external pressures while making decisions," he said. The conference focused on emerging risks in Bangladesh's financial sector.
Association of Bankers, Bangladesh (ABB) Chairman Mashrur Arefin said he does not in principle support the draft provision in the Bank Companies Act that proposes 50 per cent independent directors on a bank board.
"If 7 out of 15 are independent directors, a conflict will arise between the two groups, and the managing director will be caught in the middle," he said.
Former Bangladesh Bank governor Ahsan H Mansur had proposed that bank boards should include 50% independent directors, but he opposes the idea as ABB chairman.
"I am opposing this proposal because I don't support it in principle. They will just come and fill up the banks," added Mashrur, who is also the managing director of City Bank.
Dr Mustafizur Rahman said the spillover risks from geopolitical tensions in the Middle East, warning that the conflict is affecting Bangladesh's export-oriented sectors, particularly ready-made garments, with knock-on effects for the banking system.
The event concluded with remarks from Dr Shah Md Ahsan Habib, a professor at the Bangladesh Institute of Bank Management.
jasimharoon@yahoo.com