Bangladesh Bank has taken steps to implement an integrity strategy from early next year to improve governance at banks and non-bank financial institutions.
The central bank will be implementing the strategy at a time when the country’s banking sector is facing multifaceted crisis created due to lack of governing skills and financial management, economists and bankers have said.
All listed banks, therefore, have been instructed to prepare their ‘Code of Conduct’ by December 31 this year, which must be in effect from January 1 next year.
The central bank circulated a ‘Code of Conduct’ recently for all banks and NBFIs to strengthen regulations in daily operations. All banks and financial institutions have been asked to adhere to the newly-formed guidelines by the Bangladesh Bank.
The central bank officials said the code of conduct is a part of the efforts to ensure integrity and high ethical standards in the financial sector in their day-to-day activities aligned with the government’s Vision 2021.
Signed by BB General Manager Abu Farah Md Naser, the circular reads that the key objective of this code of conduct is to protect the interests of customers, owners, employees and stakeholders of all banks and NBFIs.
A total of 57 commercial banks and 33 non-bank financial institutions are currently operating in the country.
Former BB Deputy Governor Khondkar Ibrahim Khaled said the Code of Conduct is a good thing to have, but the regulatory body should follow up whether people are following the regulations outlined in the code of conduct.
“There are many laws and regulation in our country. However, none of these seemed to have affected former BASIC Bank Managing Director Sheikh Abdul Hai Bachchu. So the authorities should focus on the implementation of the guidelines and rules for bringing governance in the banking sector,” Ibrahim Khaled told the daily sun on Friday.
BB said the code of conduct will serve wider interests of the society as well. Another key objective of the guidelines, it said, is to promote fair competition among institutions and strengthen overall banking and financial environment in the country.
BB General Manager Abu Farah Md Naser said, “The central bank issued the code of conduct in line with government’s National Integrity Strategy. The main object of the code of conduct is bringing governance in the financial institutes improving the work environment with more responsibilities.
The guideline is a minimum requirement, but not necessarily limited to the instructions given. The banks and NBFIs can also develop their own guidelines based on their needs, he said.