Commercial banks have to submit scores of reports on compliance -- on average 263 a year -- to the central bank, which a new paper says do not reflect the reality but raise costs for the lenders.
Public and private banks adhere to 15 laws or ordinances, 46 guidelines, 10 regulations, and 478 circulars related to compliance.
The opinions were shared at a roundtable titled “Costs for compliance with regulations in banks” at the Bangladesh Institute of Bank Management's (BIBM) office in Dhaka yesterday.
It said banks provide incorrect information in the reports at their convenience, and it should be stopped. It called for cutting down the number of the reports.
Mohammad Tazul Islam, an associate professor of the BIBM, presented the paper, according to a press release of the institute.
Both workloads and costs are increasing for such compliance, said the paper.
Speaking at the roundtable, BIBM Director General Toufic Ahmad Choudhury said no concession should be given on compliance. He urged banks to ensure compliance more efficiently.
Barkat-e-Khuda, former professor and chairman of the department of economics at the University of Dhaka, said there is no alternative to compliance, which protects the interests of all stakeholders of banks including the employees.
Helal Ahmed Chowdhury, a supernumerary professor of the BIBM, said compliance can help local banks in corresponding banking, which ultimately facilitates trade financing.
"Banks should take the advantage of technology that can ease their reporting to the regulator," he said, adding that regulators should meet frequently to strengthen coordination among them.
The former managing director of Pubali Bank said there is no scope to remain noncompliant. However, seven to eight departments of the central bank ask for similar information from banks, so it should be coordinated.
Md Yasin Ali, another supernumerary professor of the institute, said banks have complained that it is difficult to maintain compliance because of the reduction in interest rates, but it is not correct.
More than 91 percent bankers think compliance reduces the risks for banks, said the press release. Prashanta Kumar Banerjee, director for research, development and consultancy of the institute, also spoke.