Monirul Alam of DOT
Asking banks to become caring for respective clients, Bangladesh Bank (BB) Governor Fazle Kabir has said that good relation between clients and banks is crucial to reduce non-performing loans (NPL) and maintain asset quality.
The governor said it is often alleged that banks are not sensitive to the genuine problems of the clients and sometimes abandoned midway of a project or the loans leaving all the woes on the shoulder of the entrepreneurs.
“Consider genuine problems. It’s a win-win match. Increase your sensitivity to clients’ requirements and act immediately by building and maintaining good relations up to the branch level. You must support them (borrowers). We have to support them. I think there should be a supportive role not just that all the things will be done from borrowers-end,” Fazle Kabir said at a programme for launching of Guidelines on Internal Credit Risk Rating (ICRRG) system for banks at BIBM auditorium in the city on Thursday.
The governor said the NPL of banks got to be higher volume in last September which draws huge criticism in almost all discussions everywhere. “It (NPL) will be moderate in last quarter of 2018 and the trend would continue even in the current quarter.”
The governor said the new guideline will help banks to assess good clients for fresh investment leading to keep the asset quality protected and reduce ratio of NPL substantially.
He said the ICRRG will assist the ongoing improvement endeavors of the banking sector reaching internationally acclaimed standards. He said issuing the ICRRG was a commitment of the central bank within 2019 apart from regulatory reforms in the banking sector which will be assessed by the World Bank and IMF later this year.
“You must pro-actively manage loan portfolio,” said the governor.
Chief Executive Officers (CEOs) and Managing Directors (MDs) of different banks were present on the occasion. Association of Bankers Bangladesh (ABB) chairman and Dhaka Bank’s CEO Syed Mahbubur Rahman said the ICRRG is far better than the previous one-ICRG (Internal Credit Risk Guidelines) issued in 2006.
“I think some issues were missing in ICRG (2006), which have been covered in the ICRRG (2019). This one will be much useful for banks,” Syed Mahbubur Rahman said.
During presentation, Bangladesh Bank’s Deputy General Manager Hosne Ara Shikha said banks should follow this rating system (ICRRG) without making any changes, extension, modification and deletion for better management of loan portfolio.
Bangladesh Bank’s Executive Director Ahmed Jamal chaired the occasion while it was addressed by Financial Institution Division secretary Md. Ashadul Islam, Bangladesh bank’s Deputy Governor Ahmed Jamal, General Manager Abu Farah Md. Naser and BIBIM director Prashanta Kumar banerjee, among others.