Finding qualified MDs becoming difficult in banking sector: Governor
Citing political influence as a major hurdle to good governance in the banking sector, Mansur remarked that banks often rush into similar types of business without properly assessing the risks beforehand, which frequently leads to them granting loans without fully understanding the associated risks.
It has become difficult to find good quality managing directors (MDs) and heads of departments in the banking sector, Bangladesh Bank Governor Ahsan H Mansur said today (4 October).
"Properly knowledgeable and well-trained MDs are hard to come by, which has to be seen as a failure in the banking sector," he said while addressing a programme organised at a hotel in the capital marking the 15th anniversary of Financial Excellence Limited.
"It is also difficult to find capable heads of departments – whether in the corporate division or the consumer division," the governor said, adding that the challenges ahead will only be greater.
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The event was also attended by Finance Adviser Salehuddin Ahmed as the chief guest.
The governor said that a lack of analytical or operational knowledge among bankers would prevent the establishment of a robust financial sector. He emphasised the necessity of strong analytical skills.
"To make any decision, one must be informed. This must be implemented at the corporate level, the bank level, the central bank level, and the government level," Mansur said. He stressed that bankers' skills must be developed through proper training, and that specialised development organisations should be established, primarily by private companies.
The governor described the condition of Bangladesh's financial sector as "very weak." He noted that the sector constitutes only about 50-53% of the GDP, which he found unacceptable when compared to figures such as over 200% in China and close to 100% in India. He added that the simultaneous rise in non-performing loans is a weakness in banking management.
Citing political influence as a major hurdle to good governance in the banking sector, Mansur remarked that banks often rush into similar types of business without properly assessing the risks beforehand, which frequently leads to them granting loans without fully understanding the associated risks.
The governor mentioned that only 64% of the total population is currently integrated with the financial sector. He highlighted the major challenge of building a cashless society, which requires the integration of technology with the financial sector, noting that there is still much work to be done in this area.
He stressed the need for microcredit to be automated for it to remain viable. He also pointed out that the "core banking systems" of most banks in the country are Indian, and therefore, it is essential to build local capacity. "The integration of finance and technology is urgent."
The governor assured that various forms of support would be provided by the government. "If the driving forces of the financial sector are not properly trained, and if the next generation and current mid-level staff are not brought along, the progress cannot be successful," he said.
