Strong role of top executives is the only solution to soured loans, says the central bank chief

Bangladesh Bank is set to launch international debit cards soon, Governor Md Abdur Rouf Talukder says

Published : 24 May 2023, 09:27 AM
Updated : 24 May 2023, 09:27 AM

Good governance and the strong role of top executives can be the only way to reduce the risk of default loans in the banking sector, said Bangladesh Bank Governor Md Abdur Rouf Talukder.

Ensuring good governance and keeping default loans in check are the most important factors in the banking sector, he said at the inaugural ceremony of a two-day-long conference titled ‘Banking on Digital Transformation’ at Pan Pacific Sonargaon Hotel in Dhaka on Wednesday.

Rouf made the remarks two days after a media briefing where Selim RF Hussain, the chairman of the Association of Bankers, Bangladesh Limited, said that controlling default loans has gone beyond the banking sector’s grasp. Four other top executives from different banks were present at the ABB event.

“To solve the problems tied to good governance and default loans, the two burning issues in the banking sector, we need to focus on ethical banking practices and train bankers. The implementation of banking policies and the strong role of top executives can be the solution to default loans.”

Focusing on the growing use of digital means in the banking sector, Rouf said the central bank is set to launch its international debit card soon.

Currently, international institutions, such as Visa and Mastercard, are providing debit and credit card services to the country's banks for domestic and international transactions, in exchange for a large number of foreign currencies. The initiative to launch international debit card services will reduce Bangladesh’s dependency on such institutions.

According to the central bank, debit card customers transacted Tk 13.63 billion per day through ATM booths and POS machines in March. The total transaction in that month was Tk 422.59 billion.

The banks in Bangladesh issued nearly 31 million cards until March so far.

“Everyone is living in a global village. Measures have been taken to organise training maintaining global standards to make bankers aware of this,” Rouf said, shedding light on the use of artificial intelligence in the banking sector.

“Most of the banks are using core banking solution software nowadays. The use of digital means will bring diversity to this sector and will change the nature of the business.”