Bangladesh Bank Governor Salehuddin Ahmed yesterday urged bankers to take adequate preparations for adopting a global standard guideline as the BB is likely to introduce it by 2007 for the country's banking system.
He said the central bank is planning to introduce 'BASEL-II’, a globally recognised roadmap, which will measure credit risk, market risk and operational risk of all banks operating in the country.
BASEL-II is a supervision parameter of Bank of International Settlement (BIS), which has a guideline on a bank's minimum capital requirement, supervisory review process and market discipline.
The governor said, "Some of our neighbouring countries have already introduced the guideline, whereas we are lagging behind."
Under the guideline, both local and foreign banks will work under an open exchange global system where a bank's profits will depend on its services, fund management and discipline, he added.
The BB governor made the comments at the 'Branch Managers' Annual Conference 2006' of the National Credit and Commerce (NCC) Bank Ltd in Dhaka.
Chairman of the bank M Wazhiullah Bhuiyan, Vice Chairman SM Abu Mohsin and Managing Director Md Nurul Amin also spoke at the conference.
"Bankers have to think from now on as to how they will adopt the guideline," the governor said, urging the bankers to be pro-active in adopting the guideline.
Responding to a comment, the governor said the central bank can continuously review its recently announced Monetary Policy Statement (MPS) following the current economic trend of the country.
He said "We will need to be careful about expansion of credit. But this is not a rigid one."
The BB governor urged the bank managers to concentrate on fund management to keep balance between asset and liability.
As banking is a service sector that depends on customers' deposits, the board of directors of all banks should comply with key governance regulations to ensure transparency and accountability, he suggested.
The central bank has taken a number of reform policies in restructuring the banking sector. But with this, capital market development is key to increasing investment in the country, the governor observed.
In this regard, the BB will take a joint initiative with Securities and Exchange Commission (SEC) to boost investment in the capital market, he added.
Meanwhile, officials of NCC Bank said the bank posted Tk 1.02 billion profit in 2005. As of December 31, 2005, it mobilised deposits worth Tk 221.86 billion and disbursed advances worth Tk 205.18 billion.
