BB should \\\'act promptly\\\' to deploy efficient inspection teams

The central bank should act promptly with deploying efficient inspection teams to check fraud and forgery in the country's banking sector, senior bankers and experts have said.
They have also underscored improving internal control and compliance (ICC) of the commercial banks alongside introducing code of ethics for bankers to ensure good governance in the sector.
The observations came at a national seminar on 'An Assessment of On-site Supervision of Bangladesh Bank' (BB) held at the Bangladesh Institute of Bank Management (BIBM) in Dhaka Sunday with Dr. Toufic Ahmed Choudhury, director general of the BIBM, in the chair.
Senior bankers, experts, academics and researchers stressed the need for ensuring good governance in the banking sector through improving supervisory and monitoring rolls of the central bank.
Mentioning Hall-Mark and BASIC Bank loan scams, Khondhkar Ibrahim Khaled, former deputy governor of Bangladesh Bank (BB), said the size of scams could not be so large if the central bank took timely actions.
The BB should act instantly and effectively against any sorts of irregularities, the senior banker said, adding that the central banker will depute inspection team in the specific branch of the banks concerned to prevent financial scams.
Mr. Khaled, also Dr. Muzaffer Ahmed Chair Professor of the BIBM, proposed to establish coordination among the regulators for ensuring punishment against culprit of scams including Hall-Mark.
He also suggested the central bank to introduce a code of ethics for bankers to ensure good governance in the sector.
"The BB may impose a ceiling for group loans for discouraging credit concentration with a single group," the senior banker said while replying to a query.
BB Deputy Governor Abul Quasem asked the bankers to protect their ethical standard through working out site from 'fear and favour.'
He also said the central bank is working for achieving sustainable economic growth through ensuing stability in the banking sector along with protecting depositors' interest.
The deputy governor also suggested the bankers to maintain 'daily affairs' properly for minimising their irregularities.  
SA Chowdhury, AK Gangopadhaya Chair Professor of the BIBM, said the banks will have to improve their ICC for ensuring good governance in the sector.
"Both on-site and off-site supervisions will be integrated to ensure stability in the country's banking sector," he noted.
Mohammad Nurul Amin, Managing Director and Chief Executive Officer (CEO) of the Meghna Bank Limited, said the banks should develop self auditing system to detect any irregularities before the BB.
"The role of audit committee of banks should be strengthened to check irregularities and scams," Mr. Amin, also former chairman of the Association of Bankers, Bangladesh (ABB), noted.
Helal Ahmed Chowdhury, Supernumerary Professor of the BIBM, suggested the BB to include IT expert in their inspection team for improving the quality of supervision.
Mr. Chowdhury, also former managing director and chief executive officer of the Pubali Bank Limited, said the CIB (Credit Information Bureau) of the BB should provide reports mentioning the names of banks or financial institutions and loan amount of the borrowers for assessing credit proposals properly.
"We're working to improve our quality of supervision and monitoring," Mohammad Naushad Ali Chowdhury, executive director of the BB, said.
He also said the central bank has already included IT specialists in its inspection teams.
"The top management and board of banks will have to play vital roles to curb their irregularities," the BB executive director noted.
Sheikh Mozaffar Hossain, Faculty Member of the BIBM, said the on-site supervision of the BB has not yet attained international best practice of risk based inspection.
"The BB should transform the present inspection procedure into a risk based one at the earliest convenience," Sheikh Hossain said while presenting his keynote paper at the seminar.
Among others, Dr. Prashanta Kumar Banerjee, Professor and Director of the BIBM, also spoke on the occasion.
    siddique.islam@gmail.com