Bangladesh Bank has got a Material Loss Review conducted covering the recent frauds at different banks and it has revealed that the affected banks had not taken the required measures to tackle embezzlements, said BB governor Atiur Rahman on Wednesday.
The MLS revealed that the affected banks did not maintain their essential routines like know your customer, credit risk grading and anti-money laundering provision, which could have avoided the frauds, he said while speaking at the ICCB’s interactive session on ‘International Trade Fraud: Detection and Prevention’ held at the Metropolitan Chamber of Commerce and Industry office in the capital.
The MLS review showed that the major lapses and deficiencies in the affected banks were in their credit administration, risk management and internal control and compliance functions, said Atiur.
In supervisory response to these episodes, the BB has considerably tightened its onsite and offsite vigilance on risk management, corporate governance, internal controls and internal audit functions in banks, he said.
Pursuant to BB reports on board level lapses in mandatory control and oversight functions, the government has reconstituted the boards of directors in state-owned banks with persons meeting the fit and proper eligibility criteria, the BB governor added.
He hoped that these disciplines were adhered to in right earnest so that banks would succeed in keeping themselves largely free of the stigma of insider abuses, fraudulence and losses attendant thereto.
Atiur mentioned that as part of its shored up supervisory vigilance on fraud risk management, internal control and fraud prevention practices in banks, the BB had lately been putting in place an on-line electronic ‘supervision dashboard’ that brings together a range of live transactions data from banks that can provide warning signs of potentially fraudulent transactions.
International Chamber of Commerce-Bangladesh president Mahbubur Rahman said international trade had been a major driver of global growth and the world today was significantly more economically interdependent on international trade, but the commercial crime was growing faster than international trade.
He mentioned that the recent scams that occurred in different banks, in particular the largest state-owned bank and a most important one because of treasury operations, had shaken the entire banking sector of the country.
‘We have arranged this session with the MDs and CEOs in presence of the governor with the aim of discussing on the modalities for detection and prevention of such fraud,’ he said.
Mamun Rashid, chairman, ICCB Standing Committee on Banking, Technique and Practices, urged all bank executives, especially the trade professionals, to further review their existing trade undertaking, processing and settlement model, integrate information technology delivery platform, risk management model and overall trade documentation model.
P Mukundan, director and chief of ICC – Commercial Crime Services, made a presentation on international trade fraud on the occasion.
Mohammed Hossain, national fraud risk detection and mitigation adviser to the central bank’s Strengthening Project Cell, National Credit and Commerce Bank MD and CEO Mohammed Nurul Amin, who is also the president of Association of Bankers Bangladesh, Janata Bank MD and CEO SM Aminur Rahman, Sonali Bank MD and CEO Pradip Kumar Dutta, AB Bank DMD Md Shameem Ahmed Chaudhury, and Prime Bank DMD Yasin Ali, among others, spoke at the programme.
Courtesy of New Age
