Risk-based supervision signals hope

Risk-based supervision is now a key factor for the Bangladesh Bank to ensure good governance and accountability in the banking sector. Better late than never, this is an important step for banks to open the market with greater transparency.
Provisioning based on the apprehension of future risks may also help banks take prompt corrective actions. From 2027 onward, banking will no longer proceed in the traditional way. A forward-looking approach should have been an immediate measure to ensure the survival of the sector.
Adequate training in this regard for bankers at all levels is now a must to move forward. Also, to determine expected credit losses, it is time to introduce numerical scales and standardised parameters for risk and provisioning assessment.
Though some initiatives like policy support, relaxation in the internal credit risk rating system, and widening of the single borrower limit are likely to be riskier in determining the actual strength of borrowers, RBS will definitely be a good control over the risk parameters so that banks can regain trust among people again.
Kawsik Azad Pronoy
A Banker
kawsikdbbl@gmail.com