What are the main legal areas a bank needs to deal with in its regular operation?
The main legal areas for a bank are to draw contracts between parties in lawful manner and perfection of security/collaterals for loans. However, in recent years, main legal activity for banks has become recovery of bad loans through legal process.
In your opinion, do the current legal regime in Bangladesh sufficient for timely recovery of loan from the borrowers, especially from the defaulting borrowers?
We are all aware that the current legal regime heavily favours the defaulted borrowers for timely recovery of bad loans and because of this reason more and more borrowers are attracted for defaulting on their loans. The time and process for finally enforcing a full judgment is simply not conducive to bring a culture of discipline and accountability for borrowers in the banking sector.
What legal improvements are required to strengthen the smooth operation of the banking sector in Bangladesh?
There are a lot of duplication in the overall process of a bad loans recovery which must be removed for smooth operation of the Banking sector. Our legal system is currently designed for “cure” of bad loans, which restricts from moving to a “preventive” mode. Like many other progressive countries, we should also enact laws for defaulting borrowers from availing various social benefits and restricts traveling which will encourage a “preventive” atmosphere for the banking industry.
Do you have any suggestions or greater expectations from the learned advocates working on behalf of different banks?
While the learned advocates, who are mostly engaged in the loan recovery process of the banks, are doing a fair job, they must be pro-actively sharing this insights and recommendations with the larger groups of the banks on how to expedite the process and bring more speed in the recovery management.
In your opinion, how can a bank ensure good governance, transparency and accountability?
To ensure good governance, transparency and accountability, banks must implement a proper policy of checks and balances along with control process in every part of the operations with necessary separation of policy formulation and implementation between the board and management.
The “tone from the top” is the most critical factor for ethical practice at all levels of the bank. Moreover, the compliance and audit functions of the banks must be properly empowered and instrumental to ensure good governance of banks.
How does your bank aim to bring an impact in the banking sector of Bangladesh?
As a reputed bank with over 20 years of service excellence in all parts of the country, Standard Bank is poised for a major transformation of its process and organization to offer better innovative products and solutions to its customers in the coming years and thus bring a change in the banking industry.
