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Seminar on disaster risk and impact of adopting Basel accord in Banks held in BIBM


A daylong seminar was held at the Bangladesh Institute of Bank Management (BIBM) on 05 October, 2017 in its auditorium. Paper titled "Addressing Disaster Risk by Banks: Bangladesh Perspective " and "Adopting Basel Accords in the Banking Sector of Bangladesh” were presented in the seminar Dr.Shah Md. Ahsan Habib, Director (Training) and Md. Nehal Ahmed, Professor, BIBM. Other members of the team are Dr. A. H. M. Mostafizur Rahman, Professor, Department of Soil, Water & Environment, University of Dhaka; Dr. Mohammad Tazul Islam, Associate Professor, BIBM; Atul Chandra Pandit, Associate Professor, BIBM; Tahmina Rahman, Assistant Professor, BIBM; Antara Zareen, Assistant Professor, BIBM; Tofayel Ahmed, Lecturer,BIBM;    Md. Zakir Hossain, Lecturer,BIBM; Rahat Banu, Lecturer,BIBM;    Mohammad Shahriar Siddiqui, Joint Director, Bangladesh Bank. Toufic Ahmad Choudhury, Director General of BIBM chaired the seminar. Abu Hena Mohd. Razee Hassan, Deputy Governor of Bangladesh Bank was also present as a chief guest.  Dr.Prashanta kumar Banerjee, Professor & Director (RD&C) delivered welcome speech.
Razee Hassan said, Bangladesh Bank undertook a number of initiatives to address disaster risk through different regulatory initiatives. These put banks and NBFIs in a comparatively secured zone from the vulnerability and extent of financial losses incurred due to these disasters. These supports and initiatives directly influence the banks’ overall performance in terms of loan recovery, classification, provisioning and profitability. Some of the major initiatives of Bangladesh Bank are- to provide fresh Agri-loan facilities for rehabilitation of agriculture sector in cyclone 'Aila' affected areas, agricultural loan to flood affected people at Haor areas, relief/assistance to the flood affected people particularly at north-east part of Haor areas under CSR activities, relief/assistance to the landslide affected people at Chittagong Hill tracts, etc.
You are aware that Basel Accord, particularly Basel-III, is a comprehensive risk based capital and liquidity management framework for promoting resilient banking system. Basel-III framework was basically the response of the global banking regulators to deal with the factors, more specifically those relating to the banking system that led to the global financial and economic crisis. Basel-III has some micro-prudential elements i.e. bank wise regulation with the intention to raise the resilience of individual banking institution in periods of stress. Besides, it has macro prudential focus which will reduce the risk of spillover from the financial sector to the real economy. As a result, there is a broad consensus that Basel-III will produce a banking system that is far more resilient.  However, it is important for Bangladeshi banks to implement this global framework to withstand shocks from external systems. Banks of the country are working to comply with the new capital accord, which has been formulated by Bangladesh Bank in line with global Basel-III framework. In this context, the team has undertaken this research focusing on current implementation status of Basel accords and its impact on the resilience in the banking sector of Bangladesh he added.

Deputy Governor also said, the resilience of banks becomes larger, meaning that Basel Accords makes Bangladeshi banks more shock absorbent. It is further observed that banks are successful in maintaining required CRAR, Tier-1 capital, leverage ratio and liquidity ratios.

According to the study, 47 per cent of surveyed bankers opined that banks should set future strategy to tackle impact of natural and man-made disasters on the country’s banking sector while 17 per cent of them emphasised building awareness.

 

Written by Manager

Sunday 8th October 2017