Banking

Banking sector can’t run without prudent risk management

Posted by BankInfo on Wed, Jan 05 2011 08:16 pm

Speakers at a workshop said that the banking industry can not run its business without prudent risk management.

They were speaking at a workshop on “Stress Testing, VaR and Basel II,” organised by City Bank at a hotel in the city recently.

K Mahmood Sattar, Managing Director and CEO of City Bank inaugurated the workshop.

SK Sur Chowdhury, Executive Director, KM Abdul Wadood, General Manager, Md Aminur Rahman Chowdhury, Deputy Director and Shahriar Siddique, Deputy Director of Bangladesh Bank jointly conducted the workshop, said a press release.

Ehsan Khasru, DMD and chief risk officer, B Chowdhury, EVP and head of SME and Abdus Salam Bhuiyan, head of HR of City Bank were also present.

K Mahmood Sattar in his speech emphasised that the banking industry can not run its business without prudent risk management. He informed that City Bank is managing risk in line with best industrial practice as well as Basel II norms as set by the central bank.

Khasru appraised the central bank for its proactive role in risks management. Total 40 participants from City Bank attended at the workshop.

SK Sur Chowdhury discussed on importance of stress testing for banks and also answered various issues on stress testing raised from participants.

Wadood discussed about supervisory review process and pointed out the importance of capital of a bank as well as Internal Capital Adequacy Assessment Process (ICAAP). Both Aminur and Siddique conducted practical session of the workshop.

Source: Daily Sun/ BAngladesh/ Jan-06-2011

BB to take steps to restore stability in share market

Posted by BankInfo on Wed, Jan 05 2011 05:17 pm

Bangladesh Bank (BB) will take necessary steps to restore stability in the stock market.

BB will take stock market friendly initiates on adjusting over exposure of banks and financial institutions as the call money market has already been stabilised through immediate steps taken by the central bank, BB governor Atiur Rahman said.

Atiur told this at a meeting with SEC member Yasin Ali to discuss on how to overcome the restless situation of the stock market.

At the meeting, the policy makers expressed deep concern over instability in stock market due to liquidity crises.

Recently the BB asked the SEC to take necessary steps to help stabilise stock market and following that the SEC high official met the central bank chief.

“BB will not take any decision to bring down the over exposure of banks and financial institutions, which might bring negative impacts to the stock market,” said Atiur.

He also said BB will cooperate SEC in developing a sustainable stock market to bring confidence of the investors.

Source: Daily Sun/ BAngladesh/ Jan-05-2011

BB warns Banks

Posted by BankInfo on Tue, Jan 04 2011 08:59 pm

The central bank (Bangladesh Bank) has warned banks against awarding depositors any interest higher than the rate announced.

On receipt of complaints that some commercial banks in a deviation from rules are giving more interests on deposit, Bangladesh Bank (BB) issued a circular to the banks asking those not to choose this way to lure depositors.

News: The Daily Star Bangladesh/05 Jan 2011

Banks Start Electronic Fund Transfer on Feb 24

Posted by BankInfo on Tue, Jan 04 2011 08:52 pm

Banks of Bangladesh will introduce an electronic fund transfer system on February 24 to speed up transactions and payment, the central bank said yesterday. The system will be introduced under the central bank's automated clearinghouse project. With the automation, the corporate entities will be able to make faster payment of salaries to employees and make refund warrants in the case of initial public offerings and company dividends.

It will also take remittance and various government allowances such as those for freedom fighters, widows and elderly, easily to the beneficiaries. People will also be able to use the system to pay utility bills quickly. The decision was taken at a meeting of chief executives of all commercial banks at the central bank premises. Governor Atiur Rahman presided over the meeting.

Bangladesh Bank launched the automated system for settlement of paper cheques on October 7 last year. The meeting also decided to settle high-value cheques -- Tk 5 lakh or more -- from January 31 at 1,200 bank branches in Dhaka region. Besides, all cheques in Sylhet region will come under automated clearing system from January 20 and the Chittagong region from February 3. BB chief urged the banks to take technical preparations for the sake of modernising the payment system. He underscored cooperation among banks.

Rahman directed state-run banks to take special steps quickly to this effect to survive in the competition.

News: The Daily Star Bangladesh/05 Jan 2011

Grameen Bank Employed to Run Packaging Firm!

Posted by BankInfo on Tue, Jan 04 2011 08:33 pm

Grameen Bank has been appointed by a Chittagong-based packaging company as their managing agent in a deal, dating back 20 years, giving the poor borrowers' bank a job having nothing to do with its core business. Muhammad Yunus signed the deal for Grameen Bank, granting the microlending entity all rights-just ownership aside-to run and manage the packaging business, reports bdnews24.com. His father, Muhammad Dula Meah Saodagor, represented Packages Corporation as its managing director, in an apparent case of conflict of interest. He along with his sons owned the company incorporated in 1961 as Pakistan Packages Corporation.

The family still owns the company, and Yunus still sits on the board as a shareholder director, according to documents obtained by the news agency. Signed on June 17 1990, the contract was initially valid for 15 years. Three of Yunus' brothers-Muhammad Ibrahim, Muhammad Azam and Muhammad Jahangir-signed as witnesses to the contract between the father and the son who would secure a Nobel peace prize 16 years later. In 1997, the management of the packaging business was handed over to Grameen Shamogree, a sister concern of Grameen Bank.

"The handover," Grameen Bank deputy managing director Nurjahan Begum said in response to bdnews24.com queries sent to Yunus, was executed "with consent of the owners" of Packages Corporation. The Grameen Bank managing director has evaded the news agency's requests for a face-to-face interview. Meanwhile, Prof Muzaffer Ahmed, an economist and former chairman of the trustee board of Transparency International, Bangladesh, has sharply reacted over the Grameen Bank controversy in selecting beneficiaries.

"I do not consider it an act of any moral standards," said Prof Ahmad.

"Nor was it legal," he said.

"Grameen Bank was mandated to dispense micro loans for poor people. Getting into such a contract with a family business was not morally right," said Prof Ahmad.

Mr Muzaffer, also chief of Sujan, a citizens' platform for justice, asked, "Why didn't Bangladesh Bank take any action then? Why didn't those who ran the government at the time take any steps?"

News Source: Financial Express/05 Jan 2011

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