Strategic changes in supervision techniques to check banks’ misddeds

Bangladesh Bank (BB) Governor Dr Atiur Rahman said the central bank has started introducing strategic changes in its existing supervision techniques for ensuring financial stability to check financial irregularities in the banking system.

“Some recent financial irregularities in the state- controlled banks in particular threaten to taint the image of the Bangladeshi banking system and its regulator,” said the governor while opening the Annual Banking Conference 2013 organised by Bangladesh Institute of Bank Management (BIBM) on Sunday.

dr. atiurAs part of its effort in ensuring good corporate governance in bank management, monitoring has been enhanced in the areas of responsibility and accountability of the board of directors including the chairman, directors and the chief executives of the banks in financial, procedural, administrative and policy- related issues, said Atiur Rahman.

He said internal control structure of the banks has been sought to be strengthened and attempts are also being made to streamline the process of risk identification, measurement and mitigation in the light of best international practices, reports BSS.

“With the massive digitization of the Bangladesh Bank and the banking sector, it is expected that the existing and potential loopholes would be effectively plugged,” he added.

While focusing on the BB’s activities he said the central bank has recalibrated its focus from traditional central banking to a comprehensive, all-encompassing effort at financial inclusion and financial stability in the last few years.

“Indeed, we believe that as the banking system greases the wheels of the economy, the wheels will accelerate more smoothly the more well-oiled it is. At the end of the day we will have more inclusive growth process which is of course, our ultimate objective,” he added.

He said special stress was also given on adequate financing for agriculture and allied activities, small and medium scale enterprises and promoting environment- friendly financing by the banks (Green Banking), introducing mobile banking and financial services throughout the country.

No-frill bank accounts at a nominal cost has been introduced among farmers, the extreme poor, freedom-fighters and other deprived sections of the population, he said, adding that this has improved transparency in the administration of the government’s agricultural subsidies and other social safety net payments.

The governor said mobile financial services guideline introduced by Bangladesh Bank is virtually revolutionizing the process of faster financial inclusion making strategic use of deeper penetration of mobile phone services in the country.

“Already, the mobile financial services have surpassed ten million accounts,” he added.

“Over the last few years, Bangladesh Bank has been relentlessly pursuing to attain the expected economic growth through mass participation by emphasizing on bringing a large segment of the population who are still un-served or underserved by the banking system into the network,” Atiur said.

He said people like sharecroppers, women entrepreneurs, marginal farmers who did not have access to credit before are now getting credit facilities without hassles and at affordable interest rates.