Friday, 2 December, 2022

Commercial banks run on weak foundation

Says an economist referring to bankers' failure to challenge regulator’s decision that they do no agree with

  • Staff Correspondent
  • 30 September, 2022 12:00 AM
  • Print news

Commercial banks in Bangladesh are running on a “weak foundation'', resulting in failure of the bankers to challenge any decisions of the regulatory authorities of the financial sector, said Policy Research Institute Executive Director Ahsan H Mansur. 

“Mutual respect between regulators and banks is a must for a balanced economy. As the bankers have a poor foundation in ledger books, they do not have the courage to protest any decision of the Bangladesh Bank,” he said.

Dr. Mansur, a former staff member of the International Monetary Fund, made the remarks at a meeting at Bangladesh Institute of Bank Management in Dhaka on Thursday.

Bangladesh Bank recently ordered removal of treasury chiefs of five local banks and one foreign bank for alleged involvement in raising the price of the US dollar by preserving more than necessary. However, the central bank back-tracked from the action later.

In association with Institute of Chartered Accountants of Bangladesh (ICAB), BIBM organised the dialogue on document verification systems in the banking sector at its premises in the capital.

Addressing the meeting, Dr. Ahsan H Mansur, an economist, suggested the banks to issue credit on verified information as bankers have responsibility to secure the deposit of commoners.

He claimed there is a ‘mistrust’ among the investors over the capital markets in the country due to providing “miss information” of the listed companies.

“The lack of accountability leads the stock markets to such a worse situation. When a company made its debut with the market opening IPO, the information was almost correct.

However, the real character of the company comes into light after a year when the time comes for giving dividend. If we can’t improve in accounting, the financial sector will never recover from the rainy days,” he said.

BIBM Director Mohammed Sohail Mustafa made an address of welcome while Prof Prashanta Kumar Banerjee conducted the session. ICAB council member Mohammed Forkan Uddin and Deputy Director Mohammad Deloar Hossain jointly presented the keynote paper. Dhaka University’s former faculty Prof Barkat-e-Khuda, ICAB President Shahadat Hossain, Agrani Bank Managing Director Murshedul Kabir and South Bangla Agriculture and Commerce Bank Managing Director Mosleh Uddin Ahmed were also present on the occasion.