In order to prevent the scam, Bangladesh Bank must be given full autonomy for monitoring the activities of state-owned banks as is done in case of private commercial banks. The Banking Division of the Ministry of Finance should not intervene in the operation of the state-owned banks for the betterment of the banking sector as well as businesses and economy of the country. ICCB Vice President Latifur Rahman said this at a workshop on New ISBP (International Standard Banking Practices) 2013 and URBPO (Uniform Rules for Bank Payment Obligation). The incidents of recent scam in the banking sector took place in collaboration with a group of bank officials and influential group, he said adding, “Though the Bangladesh Bank is taking measures to prevent the scams, the incidents are growing faster than actions. The International Chamber of Commerce (ICC), the world business organisation has been formulating various rules followed worldwide for international trade, he added. The ICC revised the International Standard Banking Practices (ISBP) which has become effective from July 2013 and also formulated the United Rules for Banking Payment Obligations. As the workshop will be dealing with these important topics, he urged upon participants to take full advantage of the presentation by the expert and get clarified on all issues. He said the companies engaged in international trade are facing growing threat from fraud and forgery. Besides, the recent scam in some of the state-owned banks have shaken entire banking sector, he mentioned. The commercial banks are now taking extra precautionary measures in opening LCs, which shows less import in the recent past. If this trend continues, the much needed development of the country’s industrial base will be in jeopardy, said the ICCB vice president. To face these challenges, concerned officers and authorities must be skilled about trade finance practices, said the ICCB vice president said adding, “The ICC Bangladesh often gets information on fraud activities both from local exporters, importers, institutions and also from the counterparties.” Vincent O’Brien and Digby Bennett who conducted the workshop and ICCB Secretary General Ataur Rahman also spoke on the occasion. A total of 166 participants from banks, financial institutions and export oriented industries attended the workshop and around 49 participants are expected to attend the workshop on the same topic to be held in Chittagong today (Sunday). News:Daily Sun Bangladesh/25-Aug-2013

Bangladesh Bank Governor Dr Atiur Rahman yesterday suggested bankers to bring small and medium business activities in Cox’s Bazar region under banking services to support development of the tourism sector. “Banks need to play active role to bring all small and medium business activities of the tourism region Cox’s Bazar under banking service for their further development,” Atiur said while addressing as chief guest at the opening session of a workshop in Cox’s Bazar. Officials of different banks working in Cox’s Bazar region attended the workshop on financial inclusion, said a BB press release yesterday. He said the main objective of banks is to ensure banking services for marginal and grassroots level people. Banks must play active role to reach banking services to doorstep of local people because banks are run by people’s money, he added. The governor said banks should take steps to ensure banking service for small and medium salt producers in Cox’s Bazar. He also urged banks to make banking services available for fishermen in Cox’s Bazar. — BSS News:Daily Sun Bangladesh/25-Aug-2013

CHUADANGA: Bangl adesh Krishi Bank (BKB) has fixed a target to disburse Taka 75 crores as agricultural and business loan to the farmers and businessmen here during the current fiscal. The loan is being disbursed for crop cultivation, fish cultivation, cattle, goat and ram rearing, purchasing of agriculture equipments, tractors and poverty alleviation etc. During the month of July the bank has disbursed Taka one crore and 84 lakhs among 432 loan receivers of Chuadanga region of the bank against the target. On the other hand, the bank has fixed up the target to realise Taka 69.20 crores of outstanding loan from the Chuadanga region of the bank during the current fiscal. — BSS News:Daily Sun Bangladesh/23-Aug-2013

Mahbubur Rahman, Chairman, International Chamber of Commerce Bangladesh speaks at a programme for distributing certificates among Certified Documentary Credit Specialists of Islami Bank at Mohammad Younus Auditorium on Wednesday. Islami Bank Bangladesh Limited (IBBL) arranged a reception for distributing certificates among 95 Certified Documentary Credit Specialists (CDCS) of the bank at Mohammad Younus Auditorium on Wednesday. Mahbubur Rahman, Chairman, International Chamber of Commerce Bangladesh was present at the function as chief guest, said a press release. Mohammad Abdul Mannan, Managing Director of the bank presided over the programme. CDCS is a joint project of the IFS School of France, UK, and BAFT-IFSA, USA and also endorsed by the International Chamber of Commerce (ICC), Paris. Under this programme, the bankers will achieve specialised knowledge and application of the skills required for International Trade Practice. CDCS examination was started in Bangladesh in 2008 by the supervision of British Council. 119 bankers have passed CDCS examination this year, of them 69 from Islami Bank. Dr. Toufic Ahmed Choudhury, Director General, Bangladesh Institute of Bank Management attended as special guest while Engr. Md. Eskander Ali Khan, Chairman, Executive Committee and Humayun Bokhteyar, ACPA, FCA, Director of the bank as guests of honour. Md. Nurul Islam, Md. Habibur Rahman Bhuiyan FCA, Md. Mahbub-ul-Alam, Deputy Managing Directors of the bank along with other executives were also present at the function. News:Daily Sun Bangladesh/24-Aug-2013

The central bank has been given no authority in appointing independent directors to private banks under the recently amended Banking Companies Act.

The law, passed in parliament on July 14, stipulates that three independent directors be appointed to a private bank—a new provision of the banking law.

But it is the Bangladesh Securities and Exchange Commission (BSEC) that would give the final approval—and not the central bank, despite being the custodian of banks and depositors’ money.

If the bank has fewer than 20 directors, then the number of independent directors will be two.

The copy approved at the cabinet, however, had stated that each bank would get four independent directors; the BSEC would give consent to two directors and Bangladesh Bank (BB) the other two.

“The change came during a review by the parliamentary standing committee on finance ministry before the house passed it,” said a finance ministry official.

Khondker Ibrahim Khaled, a former deputy governor of the central bank, said it was the responsibility of BB—not the BSEC—to control the banks.

“It is wrong that the BSEC consent is essential for appointing independent directors. I will only say it has not been done professionally.”

The previous law, however, had no provision that private banks’ boards should include independent directors.
Some listed private banks had one independent director to look after the interests of shareholders, and their selection was decided by the stockmarket regulator under its law.

Banks officials were sceptical of the success of the clause, as the positions were filled by relatives of the regular directors.

“The independent directors would not be able to play an active and independent role and only further the causes of the directors,” said a high official of a private bank.

In contrast, around the world the independent the directors are appointed from a central bank list of professionals with expertise and academic knowledge.

The cabinet’s decision did not prevail in another situation as well. The bill that got the cabinet’s nod forbids an individual from being a director of a bank and a non-bank financial institution simultaneously.

But the amended law allows a bank director can be a director of an insurance company for two terms. This, however, conflicts with the Insurance Act, which stipulates that the director of an insurance company cannot be a director of a bank.

Many former BB governors said the government made significant compromises in several areas with the amendment of the act.

Take, for instance, the section in the act which gives the central bank the power to remove the managing director of a state-run bank but not the board.

Khaled, also a former chairman of Krishi Bank, said the central bank should have been given adequate power in controlling the board of the state-owned banks.

Former BB governor Salehuddin Ahmed said it would have been better if the maximum number of bank directors had been fewer than 20.

“That is why the central bank had recommended making the number 13. It is only logical to take consent of the central bank in appointing the directors to protect the interest of the depositors.”

Both the former central bankers, however, agreed that a number of amended clauses were good.

Bringing down a bank’s exposure to the share market to 20 percent of their capital and increasing the banks’ paid-up capital amount to Tk 400 crore, were some examples cited.

“If the provision had been in force earlier, the share market crash in 2010 would not have happened,” said Khaled, who led the stock market probe committee.

Copies of the amended act were distributed among the banks’ managing directors on Monday, who were instructed to relay it to their respective boards and notify BB after implementation.

News:Daily Star Bangladesh/22-Aug-2013