‘Strong governance for better banking’

Tell us about the designation of the conference as the 'Regional Banking Conference'?

The Bangladesh Institute of Bank Management (BIBM) has been organizing the Annual Banking Conference since 2012 as an information and knowledge-sharing forum targeting academics, researchers, and practitioners, and a large number of participants from home and abroad take part in the conference. This year, we have tried to organize SAARC banking conference, but unfortunately only three of our neighbouring countries responded to our call. For which, we have to rename the conference as the “Regional Banking Conference”.

Who are the participants?

The BIBM is organizing the event in association with the National Institute of Bank Management (NIBM) of India, the Financial Institutions Training Institute (FITI) of Bhutan, and the National Banking Institute (NBI) of Nepal.

What’s the objective of the conference?

It is a two-day long platform of interaction that intends to bring together cross-border banking experts, academicians, and researchers to exchange and share knowledge and research outputs on banking and related issues. The banking industry throughout the world is facing too many problems and challenges. The objective of the conference is to help banking sectors of the countries to come up with the relevant information necessary to keep up with a rapidly changing global banking environment. Three business sessions will be held during the conference and 10 articles will be presented, while a total of 600 people from home and abroad including experts, bankers, researchers and students will attend the sessions. The topics of discussion will range from comparative banking practices to regulatory and supervisory issues, products, performances, opportunities, and challenges. So, the regional banking conference would help the participating countries’ in developing capacity related to banking operations.

The amount of Non-Performing Loans (NPLs) or default loans in our banking industry has been on the rise. What is the reason behind it?

Despite many the progresses of our banking industry in line with the global practices, there are some home-grown problems in our banking sector. Otherwise, why is the amount of the NPLs on the rise and loan-rescheduling has been provided so many times? The culture of impunity in our country is the main reason behind such scams. If perpetrators were punished and made an example of, it would deter others from committing those same crimes. Sadly, that is not the case. The reason behind this culture and the bad shape of banking sector is the lack of good governance.

So, how to get rid of the default-culture?

If, you asked me to give one and only solution, I must say improve governance. Governance means internal governance basically. We have to know the structure of banking sector governance. External governance is maintained by the central bank but internal governance will be maintained by the banks themselves through their effective internal control. If a bank does not maintain internal governance, the central bank can do nothing with outside monitoring. The central bank cannot improve the banking system without successful internal governance in the banks. Without improvement of good governance, the banking culture will never make any progress. If, the governance improves, it will strengthen the central bank and all this should be done without any outside interference. You must also think of formulating laws, but this is a useless decision as there are so many laws in this country without any implementation.