Bangladesh Bank Governor Atiur Rahman speaks at inaugural session of a daylong workshop at the “Regional Town Hall Meeting” for the supervisors of the central bank's Chittagong and Sylhet offices at Hotel Agrabad in Chittagong yesterday.

The Bangladesh Bank governor yesterday said he expects to see changes in the manner the central bank conducts banking supervision.

The banking regulator will constantly be more and more focused on risk, and less on routine tasks, as most of the supervisors of it are involved in the on-site inspection process, said Atiur Rahman.

"You'll be particularly interested in the changes we have planned in on-site supervision," he said at the inaugural session of a daylong workshop at the “Regional Town Hall Meeting” for the supervisors of the central bank's Chittagong and Sylhet offices.

The Department of Off-site Supervision, Dhaka and Bangladesh Bank, Chittagong jointly organised the workshop at Hotel Agrabad on "Promoting banking excellence and integrity at the branch level".

"Banking has changed and as banking regulators we must also change. The old assumptions, old certainties and old procedures just aren't sufficient anymore," Rahman said.

There are risks and vulnerabilities in the country's banking sector, and the central bank has to work harder and work smarter to uncover these risks and promote best practices in banks, he said.

"This is what we mean by promoting banking excellence."
Above all, best practices mean sound judgment in the granting of credit, lending to legitimate borrowers who have the ability and the intent to repay, he said.

Best practices also mean diligent monitoring of all credits through their life cycles, he said, adding that banks have to maintain an internal risk-rating system for all borrowers and monitor their ability and willingness to repay constantly.

"When you are visiting a bank branch as part of an inspection team, pay close attention to the branch management. Talk to them, listen to them, ask them questions. Assess their qualifications and assess their character," he said to the supervisors.

"In many cases, information about illegal or unethical activity taking place at a bank branch comes from lower-level employees. If you see something that looks wrong, in the loan files or anywhere at the branch, say something. Tell your supervisor."

Very often, illegal or unethical conduct by branch managers or staff is indicative of the same kind of conduct at the head office, Rahman said.

Abu Hena Md Razee Hasan, BB deputy governor; Mohammad Noushad Ali Chowdhury, executive director, and Masum Kamal Bhuiyan, Chittagong general manager, also spoke.

Glenn Tasky, BB banking supervision adviser, and Muhammad Allah Malik Kazemi, senior consultant, conducted the workshop.

The Daily Star/Bangladesh/ 19th March 2012