Commission needed to protect banks: Ibrahim Khaled

The government should form a commission to look into the reasons for the current vulnerable situation of the banking sector, said Khondkar Ibrahim Khaled, a former deputy governor of the Bangladesh Bank yesterday.

“The sector is not doing well, so the government should give attention to the sector to overcome the crisis,” he said at a technical session of the BIBM Research Almanac 2018.

The Bangladesh Institute of Bank Management organised the event for the second time at its auditorium, where Mohammad Muslim Chowdhury, secretary of the finance division, attended as chief guest.

The government was supposed to form a banking commission but the finance minister recently said it will not be formed anytime soon, Khaled added.

The mismatch between asset and liability has emerged as a great crisis for the banking sector, said Chowdhury.

He said the country is now hungry for long-term financing but the banks are taking deposits for the short-term.

Subsequently, he suggested banks diversify their products to invest for the long-term.

The financial sector is always volatile, not only in Bangladesh but also in other parts of the world, said SM Moniruzzaman, deputy governor of the BB. “We have to make our financial sector less volatile by following the macro-prudential regulations strictly.”

He suggested banks bring the unbanked and under-banked population under the banking umbrella, extend loans to all segments of the economy, disburse credit through proper analysis of loan application, and check the quality of management and authenticity of securities for sustainable economic growth. Moniruzzaman also called for reducing transactions costs.

The BB should strengthen its surveillance system to identify the irregularities in the banks, said Helal Ahmed Chowdhury, a supernumerary professor of the BIBM.

He also defended the new banks, saying they need more time to be compliant with the rules and regulations.

“The newcomers should develop self-regulations,” he added. The annual event was conducted in three technical sessions throughout the day.

A total 19 research papers were presented at the event, of which eight were from research projects, three from roundtable discussions and eight from research workshop of the BIBM.

Toufic Ahmad Choudhury, director general of the BIBM, chaired the concluding session, while Prashanta Kumar Banerjee, director of the institute, gave the welcome address at the inaugural session. 

The Daily Star, the Bonik Barta and DBC News were the media partners of the event.