Lack of ethics behind crisis in banking sector
Says BIBM research
STAFF REPORTER
Financial irregularities in the banking sector are increasing due to lack of ethics, according to a research report of the Bangladesh Institute of Bank Management (BIBM) released yesterday. The report says around 73 percent bankers of the country think financial irregularities in the banking sector are increasing due to lack of morals. This was stated in a research report, titled Corporate Ethics and Financial Crimes in Banks: Bangladesh Perspective, released at the BIBM Auditorium at Mirpur.
Deputy managing director of Bangladesh Bank Abu Hena Mohamaad Raji Hassan was present at the programme as the chief guest. BIBM director Shah Md Ahsan Habib launched the research report in the programme.
Reoffering to the BIBM report, director general of BIBM Tawfiq Ahmad Chowdhury said that cases of financial irregularities were increasing due to lack of morality in the banking sector.
The report says lack of punishment of those involved in irregularities was the second major cause of financial irregularities. Other factors include lack of awareness, lack of motivation for morality and low payroll of bankers. BIBM interviewed 200 bankers for this research report.
Bangladesh Bank deputy governor Abu Hena Mohammad Raji Hasan said banking business is completely dependent on confidence.
It is difficult to run a banking business when a crisis of depositors confidence starts. Recently, there has been a challenge due to the confidence crisis among bank depositors, he added.
Customers did not get their money when they wanted to get back their deposits. This crisis has become a challenge for bank managements.
He said the allegations of siphoning of money say they often take place through import-export. This charge is the highest for import of capital machinery.
But the information that is being circulated on money laundering is not really true. The amount of money that Bangladeshis are supposed to keep in Swiss banks may not be too much, he said.
The report has been submitted to the finance ministry on behalf of the central bank.
He said Bangladesh Bank was always taken harsh measures to prevent money laundering.
The National Board of Revenue (NBR), Bangladesh Financial Intelligence Unit (BFIU) is working jointly to check all types of money laundering.
BIBM director general Tawfiq Ahmad Chowdhury said good governance was implemented in the banking sector worldwide.
But our boards here are busy with loan sanctioning rather than implementing good governance. The fundamental task of the board of the global banking system is to formulate and monitor policies. But there is no circulation of good governance in Bangladesh.
Sonali Banks former managing director, SA Chowdhury said, The extreme deterioration of values is being seen everywhere in the banking sector. People are forgetting everything due to consumer economy.
Due to corruption and nepotism, peoples confidence in banks is declining. People are no longer able to trust the banks, he noted.
SA Chowdhury emphasized improvement of trust on bank.
He advised the formation of a Financial Ombudsman to listen to peoples complaints.
Former managing director of Meghna Bank, Nurul Amin, alleged that the board of a bank was the main crime cycle.
Giving an example of a foreign bank, he said that a bank of 200 years has collapsed due to just one persons crime.
He said the banks confidence crisis is worse than that of a default loan.
The image crisis is very bad for a bank. Ten per cent of the default loan is unusual for the banking sector, he added.
Professor Yasin Ali, former Executive Director of Bangladesh Bank, said morality was very important especially in the banking sector.
In all cases, someone has to be a role model. But if the bank manager is a criminal, then he cannot be made a role model, he said, adding, The defaulters should be punished. They are punished in all the countries of the world.
Former Managing Director of Pubali Bank and Senior Vice President of BIBM Professor Helal Ahmed Chowdhury and Ahmed Kamal Khan Chowdhury also spoke on the occasion.
