Governor warns against loan wrongdoing

Bangladesh’s top banker has warned the banks of ‘tough’ actions against irregularity in loan disbursement and discipline.

At a meeting on Monday, Bangladesh Bank Governor Atiur Rahman reminded chief executives of scheduled banks that banking sector was based on public confidence.

He said: “Though Bangladesh Bank has taken tough actions against the relevant banks over the recent irregularities, media is writing on their negative impacts.”

The governor had some harsh words for newspapers who he said did not write that much on the ‘good works’, including strengthening of banking supervision, that the central bank did in the last five years.

“It cannot be that one or two incidents of irregularities will wipe out all the good works,” he said.

Rahman told senior bankers: “I would like to caution you that Bangladesh Bank would not be indecisive in taking stern actions if any deviation (from rules) happens in loan discipline.”

“Strengthen your internal audit system. Be more careful in loan disbursement,” he said.

The central bank chief asked the bankers to send ‘quality’ loan proposals to board of directors of banks.

“Learn the technique to resist any undue pressure of the boards. If necessary, take assistance from Bangladesh Bank.”

He also asked the bankers to protect the interest of the clients.

At the meeting held at Bangladesh Bank conference room, the bankers suggested cuts in interest rates on industrial loans.

Deputy Governor SK Sur Chowdhury briefed reporters about the meeting.

President of the Association of Bankers, Bangladesh, a forum of chief executives, Ali Reza Iftekhar, also Managing Director of Eastern Bank, and Managing Director of Pubali Bank Helal Ahmed Chowdhury, among others, were present at the briefing.