Country’s state-owned commercial banks are losing their share in the international trade service business to foreign commercial banks (FCBs) and private commercial banks (PCBs) amid a gradual fall in their (SOBs) service quality, according to a research conducted by Bangladesh Institute of Bank Management.
BIBM presented the research paper at a workshop titled ‘Trade Services Operations of Banks’ at its auditorium in capital Dhaka and Bangladesh Bank’s Sylhet office (through videoconference).
A team led by BIBM director Shah Md Ahsan Habib presented the research paper on trade service operations of banks.
According to the research paper, the country’s state-owned banks lost 11 percentage points of its share in international trade service business mostly to FCBs.
In 2011, the share of SOBs in the business was 18 per cent, which declined to 7 per cent in 2018.
On the other hand, the share of private commercial banks in the business inched up to 74 per cent last year from 71 per cent in 2011 while the share of foreign commercial banks increased to 19 per cent from 11 per cent.
Bangladesh Bank deputy governor SM Moniruzzaman said that the international trade was mostly dependent on trade services of the banks.
New guidelines have been formulated by the central bank to smooth operation of the services, said Moniruzzaman, also the executive committee chairman of BIBM.
The commercial banks and the supervising officers of the central bank must work in close collaboration on more effective enforcement of the guidelines, he said.
Besides, the central bank’s online-based reporting and surveillance would help contain irregularities in international trade, the BB deputy governor said.
BIBM chair professor Barkat-e-Khuda said that enhancing capacity of the bankers had become vital in the wake of new challenges in the area.
Export growth would increase along with the economic growth and to cope with the growth, trade capacity building programmes for the bankers has become vital, Khuda, also a former Dhaka University professor, said.
BIBM supernumerary professor and former Pubali Bank managing director Helal Ahmed Chowdhury said that bankers must be cautious against over-invoicing by the businesses.
Scope for such evil practices could have been prevented, if there was a database of international trade, he said.
International trade would be safer and easier if banks become member of different global bodies, Helal said.
Bangladesh Bank executive director and BIBM director general Md Abdur Rahim said, ‘Adequate measures have been taken to address the problems in international trade.’
Bankers should be cautious while granting large loans and opening letters of credit involving large-scale imports and exports, he said.
Banks must not finance any international trade without knowing the exact purposes of the trade, Rahim said.
BIBM supernumerary professor and former BB executive director Yeasin Ali said that bankers’ cautiousness could stop all the scopes for irregularities in international trade.
BB’s executive director to Sylhet office Syed Tariquzzaman said that crimes and complexities in international trade had been increasing along with its growth.
Tackling such crimes and complexities has become a major challenge for the bankers, he said, adding that facing the challenges needed an adequate number of expert people in the banking sector.
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