Trade payment delays taint country's image

Bangladesh's image abroad is being “very badly” affected for some commercial banks, which delay in clearing payments against letter of credit despite having no issues, said ICCB President Mahbubur Rahman.

“We at ICC Bangladesh quite frequently receive complaints from foreign banks of L/C terms not being honoured and payments not being made on time,” he added.

The chief of International Chamber of Commerce Bangladesh (ICCB) urged Bangladesh Bank to make sure that such practices do not continue.

Rahman made the call while addressing the closing ceremony of a workshop on “Documentary trade finance: technical, legal and technology” organised by ICC Bangladesh in Dhaka recently.

He advised the workshop participants to perform their duties with due diligence by carefully scrutinising documents and ensuring that payments were made on time along with following international banking rules and regulations.

Rahman also spoke of a regulator-banker-big borrower nexus which had to be stopped, as it was causing Bangladesh's financial institutions to go through “a very crucial time”. In order to remain competitive in today's changing environment, both clients and financial institutions have to streamline their trade activities, he said.

As per an ICC 2017 survey, the major challenges facing businesses today are cost control, limited technical competency, limitations of current technology, poor productivity management and limited training and development, he said.

The banking sector had lost Tk 22,502 crore in the past decade through major scams, Muhammad A (Rumee) Ali, banking commission chairman of ICC Bangladesh, said citing reports.

Therefore, the loss per year is Tk 2,250.20 crore and per day—when 260 working days a year is taken into consideration—is Tk 8.6 crore, Ali said.

Ali, also CEO of Bangladesh International Arbitration Centre (Biac), questioned how the banking sector was able to sustain itself amidst this and declaring profits every year.

He blamed a lack of good governance and pressure from vested groups as the main reasons for such scams and urged the central bank to take remedial measures.

A total of 151 representatives of 35 banks attended the workshop.

Vincent O' Brien, executive committee member of ICC Banking Commission, Paris and vice chair of ICC Banking Commission, United Arab Emirates, conducted the workshop.

Ataur Rahman, ICC Bangladesh secretary general, also spoke on the occasion. A similar workshop was held earlier in Chittagong on December 8, participated by 80 representatives of 30 banks.