The banks yesterday sent letters to the Division seeking its representatives for three-member committees

The country’s banking sector can contribute to the country’s inclusive development in a greater way if it could be made competitive, effective and transparent, removing the existing problems, said leading economists. “The prevailing problems are identified. Necessary steps need to be taken to remove the problems as quickly as possible to ensure banking sector’s better contribution to development process,” Director General of the Bangladesh Institute of Development Studies (BIDS), Mustafa K Mujeri, told UNB. Evaluating the overall situation in the banking sector, Mujeri said he does want to term the current situation a ‘crisis’ but acknowledged problems like increase in non-performing loans and problems relating to credit disbursement, reports the news agency. Acknowledging it, AB Mirza Azizul Islam said the situation in the banking sector is not that much satisfactory with the increase in classified loans, slower economic activities and lower demand for credit.Mirza Aziz, a former caretaker government adviser, however, said there is no such situation for which one can claim that the banking system is going to collapse. On recent scams in the sector, Mujeri said the government and the central bank have taken a number of initiatives to overcome the situation but most of the steps are yet to be implemented.Expressing dismay over the delay in punishing the offenders, Mujeri said, “This doesn’t give the right signal, it rather creates confusions and suspicions among people.”“Others will get a massage that nobody will be spared if the responsible persons are punished timely and quickly for their wrongdoings. But if there is any delay, people will get prompted to repeat the offence,” said the economist.Mujeri thinks proper punishment for those who are found guilty will have to be ensured very quickly if the government and the central bank want to restore discipline in the banking sector.Responding to a query, Mirza Aziz said the steps taken so far relating to scams are not enough. “I don’t think these are enough.”On Sonali Bank’s scam, he said no remarkable step was taken over the bank board though the Bangladesh Bank clearly mentioned the board also had responsibility to that end.Mirza Aziz, however, said the irregularities that took place are past now, and hoped there would be no repetition of such irregularities.The central bank has said it is alert and strengthened its supervision and inspection systems.About the formation of banks’ governing bodies, Mujeri said the board is highest policymaking body of a bank where experienced people with adequate knowledge on bank management and its operations must be there to run it efficiently.“It’s not important whether the person is political or non-political one. But he must be experienced and must have clear idea about the operation of a bank and capability to contribute to the bank positively.But it won’t be wise for the bank if someone gets appointed only under political consideration,” he added.

The capital base of banks has swelled well above 10 percent of risk-weighted assets, a regulatory requirement, data from Bangladesh Bank shows.

Capital that banks should hold against their risk-weighted assets rose to Tk 63,694 crore or 10.68 percent at the end of June. The amount was Tk 26,713 crore in December 2009 when Bangladesh introduced Basel-II, an international standard that requires financial institutions to maintain enough cash reserves to cover risks.

“The rise in capital between December 2009 and June 2014 is 139 percent. Banks' ability to absorb losses against risks has strengthened,” BB said in a statement yesterday.

The BB said the quality of banks' assets has improved due to stricter rules in classifying bad loans. Loans will be defaulted if borrowers fail to pay back the money for consecutive three months instead of earlier six months.

Banks' profit before tax and provision surpassed Tk 10,000 crore in the six months through June, compared to Tk 18,000 crore in full-year profits of 2013, according to the statement.

Banks have adequate liquidity and there is no pressure for money in the overnight call money market, the central bank said.

Foreign exchange reserves crossed $22 billion, which is equivalent to seven months' import payments. Healthy reserves have prompted the central bank to raise the Export Development Fund to $1.5 billion from $1.2 billion.

 Social Islami Bank Limited (SIBL), sub-agent of MoneyGram, rewarded the customers of MoneyGram after a month long consumer promotion organised and run during the month of Ramadan.

Customers who received MoneyGram payments from branches of SIBL Ltd during the campaign period won prizes which were handed over to them at a ceremony at the bank’s head office in Dhaka recently, said a press release. 

Vishal Krishnan, Regional Manager, Gautam Naithani, Manager Operations of MoneyGram, Md. Shafiqur Rahman, Managing Director, A M M Farhad, Deputy Managing Director of SIBL were present.

 AB Bank Limited and Hyundai Motors Bangladesh Limited signed a Memorandum of Understanding (MoU) on car loan facilities.

Under the MoU, AB Bank will facilitate auto loan to the customers with special interest rate to buy any vehicle from Hyundai Motors Bangladesh Limited (HMBL), said a press release.

Shamim Ahmed Chaudhury, President and Managing Director of AB Bank Limited and Shareq Fahim Haque, Managing Director of Hyundai Motors Bangladesh Limited signed the MOU on behalf of the respective sides in Dhaka recently.

Imran Khan, General Manager, Marketing and Customer Care, Md. Nazimul Haque, Assistant Director, Sales, M. Headayatul Islam, Assistant Director, Finance, Mohammad Didarul Alam, Assistant Director, Accounts of Hyundai Motors Bangladesh Limited with Quazi Waseem Ahmed, Senior Executive Vice President, Head of Corporate Finance Division and Structured Finance Division, Syed Mizanur Rahman, Senior Vice President, Head of Retail Banking Division of AB Bank Limited were present on the signing ceremony.

HMBL will offer free after-sales service to all the customers those who will purchase vehicle from HMBL under this facility. HBML will also bear car registration fees for all new car finance applications through AB Bank Ltd.