Weak internal control blamed for bank scams

 Banks will have to improve their internal control and compliance (ICC) for ensuring safety and soundness in the country's banking sector, senior bankers and experts said.
They also urged the bankers to behave responsibly and maintain ethical standard to check fraud and forgery in the sector that had faced a number of scams mainly due to the poor internal control.
The observations came during discussions held at a review workshop on 'Internal Control and Compliance of Banks' at the Bangladesh Institute of Bank Management (BIBM) in Dhaka Thursday with Dr. Shah Md. Ahsan Habib, Professor and Director (Training) of the BIBM, in the chair.
Senior bankers, experts, academics and researchers stressed the need for ensuring good governance in the banking sector through implementing rules and regulations of the central bank along with applying due diligence.
 "A number of large scams occurred in our banking system is also thought to be resulted mainly from the inadequacy of our internal control system," the BIBM said in its paper, presented by its Associate Professor and Director (DSBM) Mohiuddin Siddique.
The study also said the banks are gaining insight about control system and process through 'learning by doing'. "Now, there is a scope to continuously develop industry best practice through an arrangement of sharing or exchanging this tacit and explicit knowledge among the ICC of banks."
Helal Ahmed Chowdhury, Supernumerary Professor of the BIBM, said the bankers will have to maintain ethical standard for preventing fraud and forgery in the banking sector.
"You (bankers) have to go systematically to improve the overall situation in the country's banking sector," Mr. Chowdhury, also former managing director and chief executive officer of the Pubali Bank Limited said.
Muhammad Yasin Ali, former Deputy Managing Director of the Prime Bank Limited, urged the bankers to develop their own manual and guidelines in line with the Bangladesh Bank (BB) instructions to minimise their risk.
"We've to go a long way to make an ideal situation in the banking sector," Mr. Ali, also former executive director of the BB, noted.
Shoaib Ahmed, Deputy Managing Director of the NRB Commercial Bank Limited, proposed the central bank impose a maximum ceiling for a borrower on the basis of loan consuming capacity.
He also said job security should be ensured in the banking sector.     
"The BIBM will submit the recommendations of the review workshop to the central bank for consideration," Dr. Habib said while replying to a query from the audience.
He also said the BIBM is trying to highlight different crucial issues in the banking sector through arranging seminars and workshops.
He assured the audience that the BIBM will continue with its endeavour by undertaking more academic discussions for ensuring safety and soundness of the banking sector.
Among others Dr. Toufic Ahmed Choudhury, Director General of the BIBM and Akhtar Kamal Talukder, Deputy Managing Director of the Eastern Bank Limited, spoke on the occasion.
     siddique.islam@gmail.com