After financial institutions, the central bank now brings all non-bank financial institution (NBFIs) under the early warning system to keep all their financial activities under constant monitoring.
The central bank yesterday formally introduced the early warning system for NBFIs in the backdrop of frequent financial scams in the country’s banking sector. “Introduction of the early warning system would help the NBFIs consolidate their financial base and make transactions more transparent and accountable,” said Bangladesh Bank governor Dr. Atiur Rahman while inaugurating the new system at the central bank’s conference room on Tuesday in presence of chiefs of NBFIs.
Despite having a little bit problem, the country’ banking sector stands on better footing as compared with other sectors, said the governor adding that the new system would bank the NBFIs more prudent. The central bank took a number of initiatives to introduce various elements of good governance in the banking sector in order to make the financial institutions more stable.
The central bank has already introduced camel rating System, Basel II,  automated clearing house, electronic fund transfer, online CIB, online banking, internet banking, mobile banking, national payment switch and e-commerce system with a view to making the financial sector more accountable and transparent, also said the governor.
Like the board of directors of financial institutions (FIs), the identification of risks in credit management is equally important to operate its business smoothly, said the governor. He also called upon the NBFIs to strengthen their risk management cells to cut the possible financial scams. Appreciating the role of risk management cell, the governor also asked the NBFIs to identify its weak areas to reduce the financial risks. Atiur also warned FIs to strictly follow the risk management guidelines of the central bank with a view to reducing the credit risk. The proper application of risk management cell would help the banks save from any devastation, also said the governor. “We have to implement the risk management cell and early warning system appropriately to uphold the customers trust on banking sector,” said Atiur.
Despite global and domestic economic shocks, country’s banking sector remains strong due to the rational policy and guidelines of the central bank, he added.
He also underscored the need for strengthening the issues of good governance for FIs for further economic development of the country. President of Bangladesh Leasing and Finance Companies Association Asad Khan demanded for reduction of interest rates.

The Independent/18-Jun-2014