Strong role of banks' top officials can curb NPL: Governor

A strong role of top bank officials, including chief executive officers, can curb non-performing loans and fix issues related to it, Bangladesh Bank Governor Abdur Rouf Talukder said on Wednesday.

"Corporate governance and non-performing loans are two much-talked-about issues in the banking sector now. We need to bring cultural changes, and enforce ethics and good practices in the banking system through proper planning and educating the workforce," he said while addressing a summit in the capital.

The Association of Bankers Bangladesh (ABB) is hosting the two-day summit, styled "Digital Transformation Summit 2023", at the Pan Pacific Sonargaon hotel. The event, the first of its kind in the country, will end on Thursday.

Earlier in a press conference on Monday, the ABB said banks and the central bank alone cannot prevent default loans. Social commitments, tougher legal steps and a larger workforce are needed to this end, it added.

Governor Abdur Rouf Talukder, at the summit, said, "Soon we will introduce digital banks in the country. We are also planning to introduce an online real-time credit rating system very soon. Besides, we are very close to issuing national debt cards.

"We have successfully implemented the Digital Bangladesh vision. Now we are taking steps to achieve Smart Bangladesh. We also have a goal to make 75% of the transaction cashless."

The central bank governor said if a technology-based banking system can be developed, banks will be able to further diversify businesses. "This will put the country ahead in transitioning to a cashless smart Bangladesh," he hoped and cooperation among all commercial banks operating in the country.

ABB Chairman Salim RF Hossain said the summit will discuss how the growth of digital financial services in the country can be accelerated. It will help banks adopt the necessary strategies to ensure digital transformation faster.

Calling for continued research on policies, he said there is a need to increase mutual understanding between banks and fintech companies in the current context.

At the event, the ABB and the PwC jointly revealed a report based on their recent survey on digital transformation, covering 97 respondents from 39 Bangladeshi banks. Titled "The Next Banking Evolution in Bangladesh – Driven by digital transformation'', the report said 86% of the survey respondents consider mobile and web-based applications as the most successful digital approach.

Some 35% of survey respondents from the first and second-generation Bangladeshi banks believe that rapid changes in technology make it difficult to keep up, which is posing a challenge to their digitisation initiatives.

Besides, 84% of surveyed respondents from the third and fourth-generation banks say that they are partnering with MFS players for superior customer experience and servicing, co-creating products and acquiring underserved customers.

One hundred and fifty senior officials from 46 commercial banks and representatives from local and foreign organisations attended the summit.