SEANZA governors’ meet
Bangladesh Bank (BB) Governor Atiur Rahman yesterday underscored the need for strengthening corporate governance in banks, to ensure the stability of the financial sector. “Of course, we have to establish corporate governance properly in each and every bank, so as to make the economy vibrant,” said the governor, while addressing the inaugural session of the day-long international seminar on the 29th Governors’ Symposium of South East Asia, New Zealand, Australia (SEANZA), a forum of the central banks of 20 countries, at a city hotel. The aim of the forum is to foster cooperation and facilitate training of the staff of member central banks, in various aspects of central banking. It is recognised as a unique platform for exchanging views and opinions, particularly on issues of common interest among member economies. Addressing the inaugural session, the central bank governor said the BB is sincerely working to make the financial sector more stable. Structural changes in financial markets, improvements in technology, and faster innovation and globalisation were the three main challenges confronting the attainment of a sound and solvent financial sector, he explained.
To regain financial stability, the central bank has already dissolved and restructured the boards of directors of some banks, said the governor. Moreover, the central bank has imposed penalties on a good number of boards of directors of banks, to ensure the accountability and transparency of the financial sector, added the governor.
Focusing on globalisation, the governor said, “We are now a part of the global economy and that is why we have to take more cautious decisions for the betterment of the economy.”
However, growth is accompanied by risk and complexity, and, recently, banking regulations and supervision have become a more prominent public policy issue, said the governor. He pointed out that the key challenge was that the financial markets were becoming progressively more global, while regulators still largely have a national orientation.
“International co-operation and coordination are needed to improve the stability of the global financial system,” said the governor. The depth and breadth of the financial crisis has given fresh impetus to the authorities around the world to rethink existing financial stability frameworks. “In this perspective, some key questions need to be addressed: Why should financial institutions be regulated? Who needs to be regulated? How—using which tools—should regulation be conducted?” said the governor.
He emphasised that the most important task for the central bank is to maintain public confidence in the banking system and minimise the risks.
After the inaugural session, the governor presented a keynote address on ‘Macroeconomic Environ-ment and Financial Sector Stability—Managing Vulnerabilities and Crises’, wherein he said the global financial crisis of 2008-'09 has resulted in a lingering slowdown in global growth and a surfeit of global liquidity from prolonged spells of macroeconomic imbalances in major advanced economies.
Atiur Rahman called upon the financial institutions to strengthen their monitoring systems, to reduce risk factors in financial transactions. He also suggested that banks and financial institutions should continue small and medium enterprises (SME) and agro-financing, for the country’s socio-economic development. BB deputy governor and SEANZA chairman, SK Sur Chowdhury, delivered the welcome address, in which, he said that the theme of the seminar for this year is ‘Macroeconomic Environ-ment and Financial Sector Stability’. Nepal Rastra Bank governor Dr Yuba Raj Khatiwada and State Bank of Pakistan deputy governor Saeed Ahmad also took part in the symposium, among others, while a professor of Birmingham University, Dr Peter Sinclair, was the moderator.

 Southeast Bank Limited organised “Half-Yearly Managers’ Conference-2014” for Khulna, Rajshahi, Barisal and Rangpur divisions at a hotel in Khulna on Thursday.

Zakir Ahmed Khan, Advisor of Southeast Bank was present at the conference as chief guest, said a press release.

Shahid Hossain, Managing Director of the bank presided over the conference.

Additional managing director, deputy managing director, senior executive vice president, heads of branches from Khulna, Rajshahi, Barisal and Rangpur divisions of the bank were present.

In his inaugural speech, Managing Director Shahid Hossain urged upon the bank employees to work more actively and advised them to design necessary strategies to achieve the desired success in the upcoming days.

 First Security Islami Bank sponsored children’s science congress at National Museum of Science and Technology at Agargaon in Dhaka recently.

Md. Humayun Kabir Khan, General Manager, National Museum of Science and Technology presided over the programme, said a press release.

Banking sector showed rising capital strength with a weighted average core capital adequacy ratio of 10.68 percent at the end of June.

The level of capital adequacy was well above the 8.0 percent risk-weighted assets, stipulated in the Basel-II regulations.

The latest Bangladesh Bank (BB) data showed the capital requirement that banks should maintain as a regulatory obligation was Taka 63,694 crore or 10.68 percent of their total capital at the end of June this year.

The amount of the risk-weighted assets rose by 138 percent in the past five years, demonstrating a strong fundamental and low risk of the country’s banking sector, a BB official told BSS.

He said the amount of the risk-weighted assets was Taka 26,713 crore in 2009 when the central bank adopted the Base-II regulations, a global standard that banks should follow to maintain a certain level of cash reserve to fence off operational risk factors.

“The higher cash reserve reflects the higher capacity of banks to absorb shocks from operational and other losses,” the official said.

The higher capital adequacy of banks has been attributed to the prudent policy support, strict monitoring and effective training of staff of the central bank as well as commercial and specialized banks.

Cutting the time limit for classifying bad loans from six months to three months also helped a lot to bring down the amount of bad loan, which eventually strengthened the capital base.

“The banking sector also posted a stable performance in the past few years, with the non-performing loan ratio capped at a relatively low level,” the BB official said. 

The instructions came at an orientation meeting that Bangladesh Bank held with the BASIC Bank board of directors yesterday at its headquarters in the capital