Natural, man-made disasters pose 7 risks to banks: study

Staff Correspondent | Published: 22:50, Oct 05,2017

 
 

Bangladesh Bank deputy governor Abu Hena Mohd Razee Hassan, Bangladesh Institute of Bank Management director general Toufic Ahmad Choudhury, director Shah Md Ahsan Habib, professor Md Nehal Ahmed, former executive director Md Yasin Ali, Bangladesh Development Bank managing director Manjur Ahmed and Meghna Bank managing director Mohammed Nurul Amin are seen at a seminar held at the BIBM auditorium in Dhaka on Thursday. — New Age photo

A recent study conducted by Bangladesh Institute of Bank Management has revealed that large-scale natural and man-made disasters in the country pose seven risks to banks by affecting their loans, security, liquidity, interest rates, efficiency, reputation and macroeconomy.
The BIBM made public the research report titled ‘Addressing Disaster Risk by Banks: Bangladesh Perspective’ at a seminar held at its auditorium in capital Dhaka on Thursday.
The study found that banks were reluctant to preserve the data of financial losses caused by the big disasters.
According to the study, 47 per cent of surveyed bankers opined that banks should set future strategy to tackle impact of natural and man-made disasters on the country’s banking sector while 17 per cent of them emphasised building awareness.
BIBM director Shah Md Ahsan Habib presented the research paper suggesting bringing all the farm loan disbursement under the insurance coverage.
At the event, Md Nehal Ahmed, a professor at the BIBM, presented another research paper titled ‘Impact of Adopting Basel Accord in the Banking Sector of Bangladesh’.
He suggested preservation of capital as per Basel-III for a strong banking sector.
In the country like Bangladesh the movement of banking sector gets halted due to disasters and an adverse situation takes place in the banking sector due to frequent loan rescheduling and interest waiver, Abu Hena Mohd Razee Hassan, deputy governor of the BB, said at the programme.
He said that the political turmoil in 2015 also hindered the banking sector.
Abu Hena, however, said that the Basel-III was in the implementation stage and it would be implemented by 2019.
Md Yasin Ali, former executive director of the BB, said that an unstable situation was prevailing in the country’s banking sector.
Bank employees are facing sudden termination while people from other sectors are being appointed to senior posts with high salaries in banks, which is not a good news for the banking sector, he said.
BIBM director general Toufic Ahmad Choudhury, Meghna Bank managing director Mohammed Nurul Amin and Bangladesh Development Bank managing director Manjur Ahmed also spoke at the event.

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