Corporate governance fault leads to credit access manipulation: Atiur

UNB, Dhaka :
Bangladesh Bank (BB) governor Dr Atiur Rahman on Saturday observed that the corporate governance weaknesses linger in many banks, allowing dominant equity holders to manipulate credit access, credit appraisal and internal control processes to their own advantage.
He also said lending resources of banks continue being channelled largely to well-off borrowers, often with insufficient diversification and inappropriate asset liability and maturity mismatches.
The central bank governor was addressing a national seminar on ‘Banking Future Vision’ organised by Association of Bankers, Bangladesh (ABB) at Radisson Blu Water Garden hotel in the city.
Jan Vasco, managing director of Risk Solution Pte Ltd, presented the keynote paper at the seminar held with ABB chairman Ali Reza Iftekhar in the chair.
The audience of the seminar were mainly from the banking sector with eminent participants including chairman of Banks Association of Bangladesh (BAB) Nazrul Islam Majumder and Deputy Governor if Bangladesh Bank SK Sur Chowdhury.
The Bangladesh Bank governor observed that boards and senior managements at the banks fixated mainly on quick short term gains.
They tend to get tempted towards speculative playing up of market volatility, heightening destabilisation risks harmful for longer term institutional soundness and viability, he noted.
Dr Atiur said myopic vision and focus on immediate gains deprives banks of future earning opportunities from cultivating new customer bases.
He said banks are failing to fulfil their corporate social responsibility obligation of combating inequity and poverty in the society.
“The Bangladesh Bank has accorded high priority to consumer interest protection concerns in banking services,” he said, adding that banks will need to accord the same high priority to this in their own strategic plans, putting in place processes and access channels like help desks; and above all, sensitising bank personnel to respond properly and swiftly to customer grievance concerns.
He said steady and incessant drive of inclusive growth is causing poverty to recede fast; GNI per capita has risen to USD 1190 in FY14, with a continual uptrend. Bangladesh has impressive bank account access with low gender and income gaps relative to other South Asian countries.