Good governance stressed for disciplined financial market

Businesses have urged for ensuring good governance for a disciplined financial market in the country.

They observed that institutional weakness, weak governance, lack of due diligence in loan disbursement, concentration on large borrowers and slow loan recovery process posed as serious concerns to the efficiency of many financial institutions.

They came up with the observation at a seminar on ‘Restructuring & Liquidation of Financial Institutions and Impact on Stakeholders’ organised by Dhaka Chamber of Commerce and Industry on Thursday, said a press release.

Prime minister’s economic affairs adviser Mashiur Rahman attended the seminar as chief guest.

DCCI president Osama Taseer said that the high amount of non-performing loans impacted the financial sector as well as the entire economy through slow credit recycling, pushing the liquidity shortage and impacting the creditworthiness of overall banking industry.

Bangladesh Bank needed to strengthen its monitoring mechanism while some intuitional and policy reforms were needed to address the state of fragile financial institutes like framing ‘Financial Sector Restructuring Authority’ to oversight the recovery of underperforming institutes, he said.

Mashiur Rahman recommended the financial institutions to conduct internal as well as external audit in a transparent manner on a regular basis.

Regarding the stock market, he said that the capital market did not have good shares nor good companies came into the market, and for that reason the investors had to depend on poor quantity of shares to trade.

He also urged for policy reformation, modernisation and policy simplification for a strong financial market.  

IDLC Finance Limited CEO and managing director Arif Khan, in his keynote paper, urged for establishment of the bond market and discouraged banks to go for long term lending as they took short-term deposit.

In order to cut down non-performing loans, he stressed on good governance, strong monitoring by the central bank and ensuring punishment for the wrong-doers.

RSA Consulting Partners managing partner Sohail R K Hossain, also a former City Bank managing director, presented a keynote paper on resolving the crisis in the financial market where he stressed for consolidation of non-performing banks, more freedom to Bangladesh Bank, restructuring of weak financial institutions, increase capital adequacy ratio, not breaching advance-deposit ratio.

Supreme Court advocate Mustafizur Rahman, Dhaka Stock Exchange director Minhaz Mannan Emon, Bangladesh Bank general manager Md Kabir Ahmed and Bangladesh Securities and Exchange Commission director Md Abul Kalam spoke on the occasion as panel discussants.

The speakers stressed on corporate governance, strong monitoring of Bangladesh Bank, implementation of Company Act, restructuring process, confidence build-up, use of ADR to resolve pending financial disputes.

DCCI senior vice-president Waqar Ahmad Choudhury proposed to prepare a pragmatic recovery policy to aim primarily at equity objectives, to restore deposit holders’ assets, liquidity, and solvency in financial institutions through restoring enhancing credit discipline. 

In the open discussion session, former DCCI senior vice-president MS Shekil Chowdhury, former vicepresident M Abu Horairah, former directors AKD Khair Md Khan, Major (retd) Yead Ali Fakir, IPDC managing director Mominul Islam, Pubali Bank Securities Ltd Managing Director Mohammad Ahsan Ullah, United Finance managing director Kaiser Tamiz Amin, EBL Securities managing director Md Sayedur Rahman, NDB Capital managing director Kanti Kumar Saha, DSE Brokers Association director Md Ali also spoke on the occasion.

DCCI vice-president Imran Ahmed, directors Akber Hakim, Ashraf Ahmed, Enamul Haque Patwary, KMN Manjurul Hoque, Md Al Amin, Shams Mahmud and former president RM Khan were also present on the occasion.