Thrust on strengthening independence, capacity of BB

The 18th Nurul Matin Memorial Lecture on Ethics in Banking was held at Bangladesh Institute of Bank Management (BIBM) on Monday.

BIBM organised the lecture styled 'Ethics in Banking' at its office at Mirpur in the capital.

Dr. Junaid Kamal Ahmad, India Country Director, The World Bank delivered keynote speech at this program. 

Bangladesh Bank Governor Fazle Kabir presided over the session while BIBM Director General Abdur Rahim offered address of welcome.

Members of Board of Directors of Bangladesh Bank, former governors, deputy governors, senior central bankers, government high officials, BIBM’s chair and supernumerary professors, top executives from different banks, university professors, academicians, faculty members of BIBM, senior bank executives, media representatives, officers of BIBM participated in the program.

Dr. Junaid Kamal Ahmad, a Bangladeshi national, is currently the World Bank Country Director for India.

In his keynote speech, Dr. Ahmad recommended for strengthening the independence and capacity of the central bank for the safeguarding of the banking system. Dr. Ahmad reflected on the importance of ethics in the financial system as critical for establishing trust of the public in the banking system. However, Dr. Ahmad stressed that the principle of ethics could not easily offer organizing principles for the design and development of the financial system. 

Instead, Dr. Ahmad gave greater importance to the management of public policy and regulatory framework and the balance between the two for the functioning of a financial system. 

Drawing an international experience Dr. Ahmad outlined the importance of corporate governance that focuses on the responsibility of bank governing board, management and employees. But, he added, that the impact of corporate governance measures would depend on the strength of the overall governance around the financial sector. “ A parliament that follows the principles of ethics is critical for the growth of an ethical banking system.”. 

Dr. Ahmad stressed the importance of central bank in securing stability and efficiency of the banking system. At the same time, he emphasized the importance of the civil society for creating additional voice in the checks and balance in the financial system. 

He congratulated the BIBM for introducing and continuing lecture series on ethics and banking.  Dr. Ahmad added, “It is an honour given to give a lecture in remembrance of one Bangladesh’s founding civil servant, Deputy Governor Nurul Matin and his leadership”. The lecture series according to Dr. Ahmad focuses on finance which is at the is the heart of the economy a nation. “The focus on ethics reminds us that public policy of any nation must be built on what is good for the common citizen.  Ethics in Banking is central to this approach.” 

BB’s Governor Fazle Kabir said, Bangladesh Bank’s supervisory capabilities are being continuously upgraded. Bank inspectors are being rigorously trained and IT is being employed to assist them in the surveillance process. Various schemes of assistance have been put into effect to boost export performance and exchange rate has been prudentially maintained at a level leading to a competitive external sector. 

Financial stability is continuously monitored by a specialized department at the central bank. Macro prudential policies are strictly utilized to maintain the sound health of banks he added. 

He also said, unscrupulous activities however sometimes affect many incredible achievements. Today not only the technique of fraudulent practices has changed but also the heightened aspirations of many stakeholders make the banking system vulnerable. Bankers in collusion with adventurous and influential borrowers do threaten for the entire economy. Such a situation makes ethical behavior more difficult and challenging. Reciprocally, he underscores the heightened need for promoting ethics in banking he mentioned in his speech. 

Fazle Kabir expects that the Memorial Lecture will motivate young bankers towards honesty and patriotism and will move towards more professionalism in future. 

--rmc//