SCBs non-competitive, suffer from poor management skill

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FE Report
Speakers at a conference Saturday said public sector banks are non- competitive and suffering from poor management skill.
They held discussion on opportunity of green banking, problems at the capital market and challenges in micro finance to the agricultural sector.
The speakers highlighted those issues at the concluding session of 18th biennial conference of Bangladesh Economic Association (BEA) at the Institution of Engineers in the city.
"Public sector banks have continued to suffer from poor management skill for which profitability of state-owned commercial banks (SCBs) has remained small," Md Liakat Hossain Moral, member, BEA said in his paper titled Banking Sector Reform in Bangladesh: Measures and Economic Outcome.
He said the banking system is still geographically fragmented, distorted and noncompetitive even in the
post- reform period.
Moral said the SCBs still hold 32.9 per cent deposits and 34.6 per cent of advances of the banking sector of Bangladesh.
Moral suggested reforms for bringing independence of the banking system and increasing competition and efficiency in financial intermediation.
Wali-Ul- Maruf Matin, Chairman of the Reliance Asset Management and member of the BEA said the country's capital market has inadequacy in alternative investment opportunity and lacks variety in mutual fund (commodity, private equity, hedge fund or derivatives).
The delay in implementing demutualization of stock exchanges are frustrating for general investors, Matin said in his paper on the Capital Market in 2012 in the light of experience of 2011.
He said the SEC should make mandatory licensing for stock brokers and dealers to graduate the market into an efficient and performing one.
About challenges in microfinance in agriculture sector Md Abdus Sobhan, BEA member and Assistant General Manager of Bangladesh Krishi Bank in his paper said non-farm and allied agricultural sectors were generally overlooked by microfinance due to unpredictability of returns in this sector.
"Although the non-government organisations engaged in microfinance in the country claimed their operation to be the provision of loan to agriculture sector, the scenario was different," Sobhan said.
The poor people had taken loan in the name of agriculture and invested in other sectors, he added.
About green banking Shah Md. Ahsan Habeeb, Director (Training), Bangladesh Institute of Bank Management said local banks have to innovate their own technique in introducing green banking instead of imitating other international banks.
He said the board of directors of the particular bank should come forward and implement green banking to graduate the local bank at international standard working environment.
BEA member Jamaluddin Ahmed, Masih Malik Chowdhury, Mihir Kumar Roy also presented papers during the conference on Transparency and Financial Reporting of Central Bank, Value Reporting on Micro and Macro Perspective, Stock Market for economic growth and Islamic banking and economic Welfare: Some Ethical Issues.