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Bank MDs seek protection from aggressive takeovers

  • Published at 01:18 pm January 4th, 2018
  • Last updated at 12:18 am January 5th, 2018
Bank MDs seek protection from aggressive takeovers
Increasingly concerned over the phenomenon of takeover of banks in 2017, a number of managing directors (MDs) and chief executives have sought protection from the Bangladesh Bank over the issue. They sought this support in a bankers’ meeting held at the Bangladesh Bank headquarters on Wednesday. Meanwhile, the central bank delivered a strong note of caution to the commercial banks against the build-up of aggressive loans. Bangladesh Bank Deputy Governor SK Sur made the disclosure to the media. Addressing the concerns expressed by the bankers, Bangladesh Bank Governor Fazle Kabir said: “Changes in the ownership is a regular event in the banking sector. If someone wants to leave by selling shares, nothing can be done about it. So, there is no need for concerns. “However, the central bank has adopted a zero tolerance policy regarding good governance in the banking sector. MDs found to be involved in irregularities will face stern action, including suspension.” Meanwhile, detailing the agendas discussed in the meeting, the deputy governor said: “All aspects of the banking sector was discussed in the meeting. Bankers spoke about changes in the ownership of banks. “Unless there is evidence of irregularities in this process, the Bangladesh Bank cannot interfere. The MDs have also been warned that irregularities will not be tolerated by the central bank.” He pointed out that the banks had been warned about the build-up of aggressive loans facilitated from deposits. “Bangladesh Bank will soon take steps to bring down the loan limit of these banks,” he added. According to the Bangladesh Bank official, the Islamic banks can currently invest 90% of its total deposits, and the limit could be reduced to 88%. On the other hand, the conventional banks can invest 85% of its deposit, which could be brought down to 80%. Chairman of Association of Bankers, Bangladesh (ABB) and Dhaka Bank MD Syed Mahbubur Rahman told this correspondent: “We have seen some shifts in the banking sector last year, and we, along with the depositors, are concerned about it. “We want Bangladesh Bank’s intervention regarding the issue.” He added: “The Bangladesh Bank directed us [the bank MDs] to implement more methods to curb hacking attempts, figure out why export growth is witnessing a negative trend, and bring down non-performing loans (NPLs).” Mahbubur further said the central bank had instructed the bank MDs to make the exchange houses in abroad more active in an effort to increase remittance. According to sources, some of the banks in Bangladesh face delays in paying their bills to foreign banks. Upon receiving complaints from several international banks, those banks have been warned. The Bangladesh Bank has also directed the MDs to make an effort to keep the foreign currency market stabilized, and avoid putting too much pressure on the central bank reserves. The meeting, chaired by Bangladesh Bank Governor Fazle Kabir, was attended by high-ups of the central bank and MDs of commercial banks operating in Bangladesh. This article was first published on Bangla Tribune
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