Political consideration in governing the banking sector and dual regulatory system for the state-owned commercial banks are the major problems for banking sector reform,
said speakers at a discussion on Saturday.
At the roundtable ‘Banking Sector Governance: Reforms and Impact’, they said political consideration in governance and monitoring of the banks was seriously affecting the sector and the overall economy.
The programme was organised by Institute of Governance Studies of BRAC University in Brac Inn conference room in the capital.
‘The SCBs are in a tight position if we consider the key parameters of the banking. The political consideration of the government is one of the main reasons for it,’ Institute of Governance Studies research fellow Shahidul Islam said while presenting the keynote paper on the occasion.
He said although the private commercial banks had accomplished the BASEL II requirement for capital adequacy but the SCBs were far behind.
‘The Bangladesh Bank should be allowed to exercise more power on the SCBs, especially in appointing the board of directors,’ he said.
He also said the excessive risk taking mentality of the PCBs also worsened the situation time and again.
Centre for Policy Dialogue additional director Khondaker Goalm Moazzem said lack of regulatory supervision was not only a problem for the SCBs but it was also intense in the PCBs.
‘The high interest rate in the PCBs is not market driven, rather it is a syndicated move by the commercial banks and the BB should focus on it,’ he said.
BB‘s economic adviser Akhtaruzzaman said the banking regulator was working to change the relevant laws for having greater power on the SCBs.
‘We are revising the relevant laws for increasing power of the BB on the SCBs as we also have identified the problem of such practice,’ he said.
Unnayan Onneshan chairman Rashed Al Mahmud Titumir and IGS director Rizwan Khair were also present, among others, on the occasion.
-With New Age input