It\\\'s time to review security system by banks

Finance Minister AMA Muhith is pleased with the country's banking sector performance as the sector, according to him, 'now stands on a strong footing with a satisfactory expansion'.
But how far is his statement, delivered at the Sonali Bank's annual conference held at a city hotel last Saturday, tenable in the case of the state-owned banks (SoBs)?
The Hall-Mark scam involving the largest SoB -- the Sonali Bank (SB) -- had come as a rude shock even to a layman because of the tonnes of money that was siphoned off by crooks, in the absence of proper monitoring and supervision by the management of the bank.
The SB is yet to overcome the loss it has suffered, in terms of money and image, from the scam. The bank might be able to retrieve the monetary loss, partially, but it might take quite a long time to get back its original image which was not that bright though, in the past.
In fact, there are reasons to develop a feeling that the top management of the bank is not adequately alert and attentive to the task of retrieving the lost image of the SB. The flaws identified by none other than the secretary, Bank and Financial Institution Division, M. Aslam Alam in the bank's 'risk management' system, would only point to the failures on the part of  the top management of the SB.
Mr. Alam cited the recent looting of money from the unsecured vault of the bank's Kishoreganj branch and also revealed the loss of $0.25 million to the international hackers who had cracked into the bank's password. The secretary also pointed his accusing finger at the bank management for keeping the close circuit cameras at the head office inoperative. Criticism also came from the top official of the banking division about wrong selection of large borrowers by the bank over the past many years.
The situation with other SoBs may not be as bad as is in the case of the SB. But they, too, are facing somewhat identical problems, in varying degrees. However, intensity-wise, those, possibly, are not as critical as those of the SB.  
Historically, the activities of all SoBs, including their loan operations, are not effectively monitored and supervised, unlike the cases with most private sector banks. It could be because of the fragmented authority being enjoyed by the government and the central bank to oversee the activities of these banks. Despite strong suggestion from experts and International Monetary Fund (IMF) to transfer controlling authority in full to the central bank, the government has retained most part of its control over the board of directors of the SoBs.
Such control has always been considered a deterrent to the healthy growth and satisfactory performance on the part of the SoBs. The government, while using its controlling authority, does at times unduly interfere in the affairs of the banks, including decisions about approvals or sanctions or even disbursements or recoveries of loans.
And even if the government, irrespective of parties in power, restrains itself, a few directors, appointed by it under political considerations, tend to indulge themselves in activities that cause more harm than good to the banks. And the Bank and Financial Institution Division usually has always watched from distance many unpalatable developments. The incumbent secretary of the Division appears to be an exception. He has tried to say a few truths about the management of the largest of the SoBs. But as a controlling authority, the Division does need to be a bit more proactive in streamlining affairs of the SoBs.
The government apart, is the central bank somewhat 'soft' towards the SoBs? There is a growing feeling that it is yet to do enough within its lawful authority to take actions against errant officials of these banks involved in financial irregularities.  
The deficiencies in risk management system vary from bank to bank. On the whole, the security system, if compared with developed and emerging economies, in local banks is not up to the mark. The situation is pretty bad in the case of SoBs, particularly in outside districts.
It is the job of the central bank to point out deficiencies in risk management and ask the banks to correct the same.
With the introduction of online banking and use of other modes of advanced technology in banking, upgradation of the security system has become all the more an important necessity for all banks in Bangladesh.
The days of guarding the bank branches by a few shabbily dressed security guards holding double-barrel guns or 303 rifles in their hands are over. The people involved in bank robberies these days carry automatic weapons and the cyber criminals, who better known as hackers, are equipped with the latest IT knowledge.  
So, banks, both private and public, will have to put them on a strong footing to counter the onslaughts that might come from gun-totting as well as tech-savvy criminals anytime.
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