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Seminar on Centralized and Decentralized Banking: A study of the Risk Return Profile of Banks held at BIBM


Press Release
Dhaka, 25 November 2018

A day long seminar was held at the Bangladesh Institute of Bank Management (BIBM) on 25 November 2018, in its auditorium. A paper titled " Centralized and Decentralized Banking : A study of the Risk Return Profile of Banks " was presented in the seminar by Mohammed Sohail Mustafa CFA, Associate Professor of BIBM. Other members of the team are Tanweer Mehdee, Assistant Professor of BIBM; Tahmina Rahman, Assistant Professor of BIBM; Rexona Yesmin, Assistant Professor of BIBM.

The study identifies the problem areas as well as success factors in Centralized and Decentralized Banking. A good number of participant’s senior bank executives, academicians, media representatives, faculty members, officers of BIBM participated in the seminar. BIBM Director General Toufic Ahmad Choudhury Chaired the Program. Dr. Prashanta Kumar Banerjee, Professor & Director (RD&C) of BIBM delivered welcome address.

Shitangshu Kumar Sur Chowdhury, Banking Reforms Adviser and Former Deputy Governor of Bangladesh Bank was present in the seminar as the chief guest. BIBM Muzaffar Ahmad Chair Professor  Dr. Barkat-e-Khuda, SA Chowdhury, Former Managing Director of Sonali Bank; Helal Ahmed Chowdhury,Supernumerary Professor of BIBM; Md. Yasin Ali, Supernumerary Professor of BIBM;  Abul Kashem Md. Shirin, Managing Director & CEO of  Dutch-Bangla Bank Ltd; Naser Ezaz Bijoy, Country Chief Executive Officer of Standard Chartered Bank Bangladesh; Dr. Utpal Kumar De, Professor, Department of  Economics, North-Eastern Hill University Shillong, Meghalaya, India spoke among others.

 Another paper titled “Government Spending and Socio-Economic Development      in Namibia” was presented in the seminar by Christopher P.P. Shafuda, Department of Economics, North-Eastern Hill University, Shillong, Meghalaya, India .

According to the study, giving certain level of power to bank branches reduces the risk of creating bad loans but much decentralization again increases irregularities in the banking system.The study, however, observed that good governance in banks could help reduce risk factors along with ensuring their profitability.
Bangladesh Bank’s banking reforms adviser SK Sur Chowdhury said that both the centralized and decentralized ways of bank management should be continued in Bangladesh. He said that both the management systems had failed to provide right kind of solution and so none of them could be claimed as the right method.

BIBM chair professor and former Dhaka University professor Barkat-e-Khuda said that adopting management system in banks would rather depend on the kind of service it would provide. ‘Banks’ business model has been changing gradually and that’s why adopting strategy would depend on the necessity,’ he said.

Former Sonali Bank managing director SA Chowdhury said that the government-owned banks provided services in the decentralized way.‘There is a need for special study in this regard, which would be helpful for the overall banking sector,’ he said.

Former Pubali Bank managing director and BIBM supernumerary professor Helal Ahmed Chowdhury said both the centralized and decentralized systems must be practiced in banks.But, monitoring over different services of banks must be strengthened with a view to providing quick services to customers.

Dutch-Bangla Bank managing director and chief executive officer Abul Kashem Md Shirin said that solution should be found after ensuring scrutiny of both the centralized and decentralized systems. Besides, the central bank will have to take decision based on the findings, Kashem said.

India’s North-Eastern Hill University economics department professor Utpal Kumar De said a detailed study on government’s spending for socio-economic development would help find the actual benefits of people. Such study would also help the government take policy decisions, he said.
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Written by Manager

Tuesday 27th November 2018