Amid growing unauthorised financial institutions, Bangladesh Bank Governor Dr Atiur Rahman on Friday urged people to remain alert against illegal banking.

“The institutions that are doing business without approvals aren’t banks…their transactions are illegal. People need to understand which institutions are banks and which aren’t,” he said.

The central bank governor was speaking as the chief guest at a bankers’ summit, ‘Fifty Years of Banking in Bangladesh-Vision 2021’, organised by Financial Excellence Ltd at Brac CDM centre in Savar.

Former central bank governor Dr Salehuddin Ahmed was present at the programme as a special guest while Nasser Bukhteare, chairman of Financial Excellence Ltd, presided over the programme. Leading banker and economic analyst Mamun Rashid was also present.

Dr Atiur said some strategic aspects should be considered for development of the banking sector. “New technology should be introduced in the banking system and the weak sides must be identified,” he said.
“More challenges are coming for the banking sector and we’ll have to face those strongly,” he said.

Atiur said the country’s banking sector has grown several-fold since independence in 1971 in tandem with the uninterrupted spell of steady, stable growth of the economy.

“Just one indicator may be enough to demonstrate the spectacular magnitude of banking business growth. Credit and investment assets of scheduled banks amounted in December 1972 to a minuscule Tk 7.07 billion; this stood 654 fold higher at Tk 4625.85 billion as of December 2011,” he said.

Atiur said excellence in banking services will require quick attention to and remedy to customer’s grievances.
“The central bank of late has attached high priority to consumer interest protection concerns in banking services. Banks will need to attach the same high priority to this in their own strategic plans, putting in place processes and access channels like help desks; and above all, sensitising bank personnel to respond properly and swiftly to customer grievances.”

Atiur said the central bank is looking forward to steadily increasing openness and integration of our financial markets with the global financial  system, for widening the cost effective access to investment resources from the global savings pool.

“Strategic plans of banks will need to have corresponding objectives and action agenda for strengthening external contacts and correspondent relationships,” he said.

The central bank also said banks will need to carry out stress-testing exercises regularly to identify and address the emerging institutional vulnerabilities against shocks of both internal and external origins.

The Independent/Bangladesh/ 15th April 2012