Political influence 'should be minimised in banking system'

FE Team | Published: November 21, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
Banks will have to make financial disclosures with off-balance sheet risks to public for ensuring their accountability and transparency, former Governor of the Reserve Bank of India (RBI) Bimal Jalan said in Dhaka Tuesday.
"Banking has different characteristics. It varies from other sectors, which is based on people trust," India's well-known economist said while delivering seventh Nurul Matin Memorial Lecture on Ethics in Banking at Hotel Purbani Tuesday evening.
AFM Nurul Matin, a renowned banker, was the deputy governor of the central bank of Bangladesh. He played an important role in preparing Bangladesh Bank Nationalisation Ordinance, 1972. He died on February 23, 1978.
The Bangladesh Institute of Bank Management (BIBM) organised the lecture on 'Ethics on Banking' in which the country's eminent economists, bankers and policy makers were attended.
Jalan, who is also a Member of the upper house (Rajya Shabha) Parliament of India, said accounting and auditing system should be updated in line with the international standards to ensure preparation of financial disclosures properly.
In 2003, he was nominated to the Rajya Shabha, the Upper House of India's Parliament, by the President for his distinguished achievement.
The India's economist expressed his opinions in favour of publishing the information of default loan portfolio to public despite the Official Secrecy Act.
"We have to make it public," Jalan said, adding that India has already enacted law relating to right to information in order to keep the people informed about major developments in different sectors including banking.
The former RBI governor recommended that the political influence should be minimised in the banking system to avoid any undue privileges.
"It has to be kept aside from banking activities to avoid any undue interferences," he noted.
Citing example of higher interest rates charged by micro-finance organisations, the economist said this is not contrary to ethics although the interest is higher than the conventional banking.
Among other, Chief Executive Officer, Bangladesh of the Standard Chartered Bank Osman Morad, Managing Director of the Micro Industries Development Assistance and Services (MIDAS) Abdul Karim and Chairman of the Association of Banks, Bangladesh (ABB) M Aminuzzaman took part in the question secession.
The Bangladesh Bank Governor Salehuddin Ahmed presided over the function while Director General of the BIBM Ruhul Amin delivered the address of welcome.